The most recent earnings release Paratek Pharmaceuticals, Inc.’s (NASDAQ:PRTK) announced in December 2018 indicated that losses became smaller relative to the prior year’s level as a result of recent tailwinds Below, I’ve laid out key growth figures on how market analysts predict Paratek Pharmaceuticals’s earnings growth trajectory over the next couple of 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’ outlook for the upcoming year seems pessimistic, with earnings becoming even more negative, generating -US$142.8m in 2020. In addition, earnings should fall off in the following year, decreasing to -US$127.2m in 2021 and -US$101.2m in 2022.
While it’s useful to understand the growth rate year by year relative to today’s value, it may be more beneficial determining the rate at which the business is growing every year, on average. The advantage of this method is that we can get a better picture of the direction of Paratek Pharmaceuticals’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put 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 35%. This means that, we can anticipate Paratek Pharmaceuticals will grow its earnings by 35% every year for the next few years.
For Paratek Pharmaceuticals, I’ve compiled three important aspects 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 PRTK 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 PRTK is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of PRTK? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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