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Orthofix Medical Inc. (NASDAQ:OFIX): What Are The Future Prospects?

Simply Wall St

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Orthofix Medical Inc.'s (NASDAQ:OFIX) latest earnings announcement in December 2018 confirmed that the company gained from a strong tailwind, leading to a high double-digit earnings growth of 89%. Investors may find it useful to understand how market analysts predict Orthofix Medical's earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

See our latest analysis for Orthofix Medical

Analysts' outlook for this coming year seems positive, with earnings growing by a significant 76%. This strong growth in earnings is expected to continue, bringing the bottom line up to US$42m by 2022.

NasdaqGS:OFIX Past and Future Earnings, May 2nd 2019

While it’s helpful to understand the growth each year relative to today’s value, it may be more insightful analyzing the rate at which the earnings are growing every year, on average. The pro of this method is that we can get a better picture of the direction of Orthofix Medical'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 34%. This means, we can anticipate Orthofix Medical will grow its earnings by 34% every year for the next few years.

Next Steps:

For Orthofix Medical, I've compiled three fundamental factors 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. Valuation: What is OFIX 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 OFIX is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of OFIX? 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 editorial-team@simplywallst.com. 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.