Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
The latest earnings release Quotient Limited's (NASDAQ:QTNT) announced in May 2019 indicated that losses became smaller relative to the prior year's level as a result of recent tailwinds Investors may find it useful to understand how market analysts predict Quotient's earnings growth trajectory over the next couple of 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 the coming year seems relatively muted, with earnings continuing to flop around in the negative territory, reaching -US$100.6m in 2020. In addition, earnings should fall further in the following year, reducing to -US$88.8m in 2021 and -US$30.6m in 2022.
While it is useful to be aware of the rate of growth year by year relative to today’s figure, it may be more insightful to estimate the rate at which the business is moving on average every year. The pro of this approach is that we can get a better picture of the direction of Quotient's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 23%. This means, we can expect Quotient will grow its earnings by 23% every year for the next few years.
For Quotient, there are three key 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.
- Management:Have insiders been ramping up their shares to take advantage of the market's sentiment for QTNT's future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of QTNT? 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.