The latest earnings release scPharmaceuticals Inc.'s (NASDAQ:SCPH) announced in December 2018 revealed that losses became smaller relative to the prior year's level - great news for investors Below is my commentary, albeit very simple and high-level, on how market analysts view scPharmaceuticals'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.
Analysts' outlook for this coming year seems pessimistic, with earnings becoming even more negative, reaching -US$37.4m in 2020. However, earnings should move into an upward direction, arriving at -US$45.4m in 2021, and -US$50.2m in 2022.
Even though it is useful to be aware of the growth rate year by year relative to today’s level, it may be more beneficial determining the rate at which the business is rising or falling on average every year. The benefit of this technique is that we can get a bigger picture of the direction of scPharmaceuticals'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 -2.3%. This means that, we can anticipate scPharmaceuticals will chip away at a rate of -2.3% every year for the next few years.
For scPharmaceuticals, I've put together three key aspects 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.
- Future Earnings: How does SCPH's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SCPH? 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 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.