Biomerica Inc’s (NASDAQ:BMRA) most recent earnings update in August 2017 revealed company earnings became less negative compared to the previous year’s level as a result of recent tailwinds Investors may find it useful to understand how market analysts perceive Biomerica’s earnings growth trajectory over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in. See our latest analysis for Biomerica
Market analysts’ consensus outlook for this coming year seems pessimistic, with earnings becoming even more negative, generating $-1.9M in 2019. Additionally, earnings are expected to fall off in the following year, before bouncing back up again to $-2.2M in 2021.
While it’s helpful to understand the rate of growth year by year relative to today’s figure, it may be more valuable to evaluate the rate at which the company is rising or falling every year, on average. The pro of this technique is that we can get a better picture of the direction of Biomerica’s earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To compute this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 50.91%. This means that, we can assume Biomerica will grow its earnings by 50.91% every year for the next few years.
For Biomerica, I’ve compiled three fundamental aspects you should further examine:
1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
2. Valuation: What is BMRA worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether BMRA is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of BMRA? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.