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The most recent earnings release OraSure Technologies, Inc.’s (NASDAQ:OSUR) announced in December 2018 suggested that the company faced a immense headwind with earnings deteriorating by -34%. Investors may find it useful to understand how market analysts perceive OraSure Technologies’s earnings growth outlook 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.
Market analysts’ consensus outlook for next year seems pessimistic, with earnings declining by a double-digit -30%. However, the next few years seem to illustrate a completely different picture, with expected earnings growth rates arriving at double digit 21% compared to today’s level and continues to increase.
Even though it’s useful to be aware of the growth each year relative to today’s figure, it may be more valuable to gauge the rate at which the earnings are rising or falling on average every year. The advantage of this approach is that we can get a better picture of the direction of OraSure Technologies’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I put 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 20%. This means, we can expect OraSure Technologies will grow its earnings by 20% every year for the next few years.
For OraSure Technologies, I’ve put together three relevant 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 OSUR 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 OSUR is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of OSUR? 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.