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Editas Medicine Inc (NASDAQ:EDIT): What Does The Future Look Like?

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Brandy Kinsey
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Editas Medicine Inc’s (NASDAQ:EDIT) most recent earnings update in December 2017 signalled company earnings became less negative compared to the previous year’s level as a result of recent tailwinds Below is my commentary, albeit very simple and high-level, on how market analysts view Editas Medicine’s earnings growth outlook over the next couple of 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. Check out our latest analysis for Editas Medicine

Analysts’ expectations for next year seems pessimistic, with earnings becoming even more negative, generating -US$160.99M in 2019. Additionally, earnings should fall off in the following year, reducing to -US$169.72M in 2020 and -US$188.85M in 2021.

NasdaqGS:EDIT Future Profit Apr 23rd 18
NasdaqGS:EDIT Future Profit Apr 23rd 18

Even though it’s helpful to be aware of the growth rate each year relative to today’s figure, it may be more valuable evaluating the rate at which the earnings are growing every year, on average. The benefit of this approach is that we can get a bigger picture of the direction of Editas Medicine’s earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To compute this rate, I put 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 -8.60%. This means that, we can expect Editas Medicine will chip away at a rate of -8.60% every year for the next couple of years.

Next Steps:

For Editas Medicine, I’ve compiled three key aspects you should further research:

  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. Future Earnings: How does EDIT’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.

  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of EDIT? 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.