AxoGen, Inc.’s (NASDAQ:AXGN) announced its latest earnings update in December 2018, which suggested company earnings became less negative compared to the previous year’s level as a result of recent tailwinds Below, I’ve laid out key numbers on how market analysts view AxoGen’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.
Market analysts’ prospects for the coming year seems relatively subdued, with earnings continuing to flop around in the negative territory, reaching -US$22.3m in 2020. Additionally, earnings should fall further in the following year, reducing to -US$13.9m in 2021 and -US$9.1m in 2022.
Although it’s useful to understand the growth each year relative to today’s value, it may be more insightful to estimate the rate at which the business is growing on average every year. The advantage of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of AxoGen’s earnings trajectory over time, which may be more relevant for long term investors. 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 39%. This means that, we can anticipate AxoGen will grow its earnings by 39% every year for the next few years.
For AxoGen, I’ve compiled three relevant 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.
- Valuation: What is AXGN 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 AXGN is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of AXGN? 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.