The most recent earnings release Invitae Corporation’s (NYSE:NVTA) announced in December 2018 revealed that losses became smaller relative to the prior year’s level – great news for investors Below, I’ve laid out key growth figures on how market analysts predict Invitae’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.
Market analysts’ prospects for the upcoming year seems relatively muted, with earnings continuing to flop around in the negative territory, arriving at -US$137.3m in 2020. In addition, earnings are predicted to fall further in the following year, decreasing to -US$82.2m in 2021 and -US$52.2m in 2022.
While it is informative understanding the growth year by year relative to today’s value, it may be more insightful evaluating the rate at which the earnings are rising or falling every year, on average. The benefit of this approach is that we can get a better picture of the direction of Invitae’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’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 25%. This means, we can anticipate Invitae will grow its earnings by 25% every year for the next few years.
For Invitae, I’ve compiled three key factors 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 NVTA 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 NVTA is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of NVTA? 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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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.