Shire plc (NASDAQ:SHPG): What Can We Expect From This High Growth Stock?
Shire plc’s (NASDAQ:SHPG) most recent earnings announcement in September 2017 revealed that the business endured a immense headwind with earnings falling by -54.88%. Below, I’ve presented key growth figures on how market analysts perceive Shire’s earnings growth trajectory 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. Check out our latest analysis for Shire
Market analysts’ prospects for the coming year seems optimistic, with earnings increasing by a significant 89.59%. This strong growth in earnings is expected to continue, bringing the bottom line up to $4,702.8M by 2020.
Even though it is helpful to be aware of the rate of growth each year relative to today’s figure, it may be more valuable determining the rate at which the company is rising or falling every year, on average. The benefit of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of Shire’s earnings trajectory over time, which may be more relevant for long term investors. 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 25.50%. This means that, we can assume Shire will grow its earnings by 25.50% every year for the next few years.
Next Steps:
For Shire, I’ve put together three important 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 SHPG 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 SHPG is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of SHPG? 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.
