What Should You Know About OncoMed Pharmaceuticals Inc’s (NASDAQ:OMED) Earnings Trajectory?
The latest earnings update OncoMed Pharmaceuticals Inc’s (NASDAQ:OMED) released in September 2017 suggested that losses became smaller relative to the prrior year’s level as a result of recent tailwinds Today I want to provide a brief commentary on how market analysts view OncoMed Pharmaceuticals’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. View our latest analysis for OncoMed Pharmaceuticals
Analysts’ expectations for next year seems optimistic, with earnings becoming less negative, generating $-51.1M in 2019. However, earnings are predicted to fall off in the following year, before bouncing back up again to $-30.4M in 2021.
While it’s helpful to understand the growth rate year by year relative to today’s figure, it may be more beneficial to gauge the rate at which the earnings are rising or falling every year, on average. The advantage of this method is that we can get a better picture of the direction of OncoMed Pharmaceuticals’s earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To calculate 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 39.87%. This means that, we can anticipate OncoMed Pharmaceuticals will grow its earnings by 39.87% every year for the next couple of years.
Next Steps:
For OncoMed Pharmaceuticals, I’ve compiled three pertinent aspects you should further examine:
1. 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.
2. Management:Have insiders been ramping up their shares to take advantage of the market’s sentiment for OMED’s future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of OMED? 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.
