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The latest earnings update PureTech Health plc (LON:PRTC) released in April 2019 indicated that the company entered the red zone with earnings dropping into the negative territory as a result of recent headwinds. Below, I've presented key growth figures on how market analysts perceive PureTech Health's earnings growth outlook over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Market analysts' prospects for next year seems relatively muted, with earnings continuing to flop around in the negative territory, generating -US$42.1m in 2020. However, earnings are predicted to move into an upward trend, reaching -US$49.5m in 2021, and -US$58.8m in 2022.
Although it is helpful to understand the growth each year relative to today’s figure, it may be more valuable gauging the rate at which the company is moving on average every year. The advantage of this method is that we can get a bigger picture of the direction of PureTech Health's earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. 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 -13%. This means that, we can presume PureTech Health will chip away at a rate of -13% every year for the next few years.
For PureTech Health, I've put together three pertinent factors you should look at:
- 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 PRTC'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 PRTC? 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 email@example.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.