The latest earnings announcement KemPharm Inc’s (NASDAQ:KMPH) released in December 2017 showed that losses became smaller relative to the prrior year’s level – great news for investors Below, I’ve presented key growth figures on how market analysts view KemPharm’s earnings growth trajectory 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. Check out our latest analysis for KemPharm
Analysts’ outlook for next year seems relatively unexciting, with earnings continuing to flop around in the negative territory, arriving at -US$42.10M in 2019. However, earnings are predicted to move into an upward trend, arriving at -US$41.84M in 2020, and -US$28.57M in 2021.
While it is helpful to be aware of the growth rate year by year relative to today’s level, it may be more valuable to determine the rate at which the company is moving every year, on average. The pro of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of KemPharm’s earnings trajectory over time, which may be more relevant for long term investors. To calculate 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 48.54%. This means that, we can presume KemPharm will grow its earnings by 48.54% every year for the next couple of years.
For KemPharm, I’ve compiled three key aspects you should further examine:
- 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 KMPH 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 KMPH is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of KMPH? 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.