Ritter Pharmaceuticals Inc (NASDAQ:RTTR): Earnings To Drop Next Year, Is It A Long-Term Trend?
The most recent earnings update Ritter Pharmaceuticals Inc’s (NASDAQ:RTTR) released in September 2017 revealed that losses became smaller relative to the prrior year’s level – great news for investors Below is my commentary, albeit very simple and high-level, on how market analysts predict Ritter Pharmaceuticals’s earnings growth trajectory over the next couple of 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. View our latest analysis for Ritter Pharmaceuticals
Market analysts’ consensus outlook for the upcoming year seems positive, with earnings becoming less negative, arriving at $-14.9M in 2019. However, earnings should fall off in the following year, before bouncing back up again to $-18.0M in 2021.
Even though it’s useful to understand the growth rate year by year relative to today’s figure, it may be more beneficial analyzing the rate at which the company is moving every year, on average. The pro of this approach is that we can get a bigger picture of the direction of Ritter Pharmaceuticals’s earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To compute this rate, I’ve appended 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 -0.94%. This means, we can expect Ritter Pharmaceuticals will chip away at a rate of -0.94% every year for the next couple of years.
Next Steps:
For Ritter Pharmaceuticals, I’ve put together three essential aspects 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. Future Earnings: How does RTTR’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.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of RTTR? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
