In December 2017, BioTime Inc (AMEX:BTX) released its latest earnings announcement, which signalled tough times for the business, with earnings reversing into losses due to recent headwinds. Below is my commentary, albeit very simple and high-level, on how market analysts perceive BioTime’s earnings growth outlook over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings. See our latest analysis for BioTime
Market analysts’ prospects for this coming year seems pessimistic, with earnings becoming even more negative, reaching -US$35.76M in 2019. In the following year, earnings are predicted to hover around the same level before reducing to -US$68.91M in 2021.
Although it is helpful to be aware of the growth rate year by year relative to today’s value, it may be more insightful evaluating the rate at which the company is growing on average every year. The advantage of this method is that we can get a better picture of the direction of BioTime’s earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To calculate 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 -29.90%. This means that, we can assume BioTime will chip away at a rate of -29.90% every year for the next few years.
For BioTime, I’ve compiled three key factors you should look at:
- 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.
- Future Earnings: How does BTX’s growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of BTX? 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.