Anaplan, Inc.’s (NYSE:PLAN) latest earnings announcement in January 2019 confirmed that losses became smaller relative to the prior year’s level – great news for investors Today I want to provide a brief commentary on how market analysts view Anaplan’s earnings growth trajectory over the next few years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Analysts’ expectations for next year seems pessimistic, with earnings becoming even more negative, arriving at -US$155.9m in 2020. However, earnings should move into an upward trajectory, reaching -US$171.3m in 2021, before plateauing down to -US$144.3m in 2022.
While it’s useful to understand the growth rate each year relative to today’s figure, it may be more beneficial to determine the rate at which the company is growing every year, on average. The advantage of this approach is that we can get a better picture of the direction of Anaplan’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 analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is -4.7%. This means that, we can assume Anaplan will chip away at a rate of -4.7% every year for the next few years.
For Anaplan, I’ve compiled three important aspects you should further research:
- 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 PLAN’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 PLAN? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.