The most recent earnings release Everbridge, Inc.'s (NASDAQ:EVBG) announced in December 2018 suggested 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 Everbridge's earnings growth outlook over the next few 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.
Market analysts' prospects for this coming year seems pessimistic, with earnings becoming even more negative, reaching -US$53.3m in 2020. Moreover, earnings should fall off in the following year, dwindling to -US$50.6m in 2021 and -US$37.2m in 2022.
While it is useful to be aware of the growth rate year by year relative to today’s value, it may be more valuable to determine the rate at which the earnings are rising or falling on average every year. The advantage of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of Everbridge's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've appended 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 -0.8%. This means, we can presume Everbridge will chip away at a rate of -0.8% every year for the next few years.
For Everbridge, I've compiled three essential factors 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.
- Valuation: What is EVBG 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 EVBG is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of EVBG? 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.