Retrophin, Inc.’s (NASDAQ:RTRX) released its most recent earnings update in December 2018, which revealed company earnings became less negative compared to the previous year’s level as a result of recent tailwinds Below, I’ve laid out key growth figures on how market analysts predict Retrophin’s earnings growth outlook over the next few years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Market analysts’ consensus outlook for next year seems relatively muted, with earnings continuing to flop around in the negative territory, reaching -US$100.8m in 2020. However, earnings should move into an upward direction, reaching -US$117.4m in 2021, before plateauing down to -US$12.6m in 2022.
While it is helpful to understand the growth year by year relative to today’s figure, it may be more beneficial evaluating the rate at which the company is rising or falling every year, on average. The pro of this method is that we can get a better picture of the direction of Retrophin’s earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To compute this rate, I’ve inserted 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 47%. This means, we can assume Retrophin will grow its earnings by 47% every year for the next couple of years.
For Retrophin, there are three key aspects 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.
- Valuation: What is RTRX 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 RTRX is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of RTRX? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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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.