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Will T2 Biosystems, Inc.'s (NASDAQ:TTOO) Earnings Grow In The Years Ahead?

Simply Wall St

The latest earnings update T2 Biosystems, Inc. (NASDAQ:TTOO) released in December 2018 suggested company earnings became less negative compared to the previous year's level - great news for investors Below, I've laid out key growth figures on how market analysts view T2 Biosystems'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.

Check out our latest analysis for T2 Biosystems

Analysts' outlook for this coming year seems relatively muted, with earnings continuing to flop around in the negative territory, reaching -US$49.8m in 2020. Moreover, earnings should fall further in the following year, decreasing to -US$41.2m in 2021 and -US$19.6m in 2022.

NasdaqGM:TTOO Past and Future Earnings, April 18th 2019

Although it is helpful to understand the growth each year relative to today’s level, it may be more insightful to evaluate the rate at which the company is moving every year, on average. The advantage of this method is that we can get a better picture of the direction of T2 Biosystems'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've appended 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 37%. This means, we can expect T2 Biosystems will grow its earnings by 37% every year for the next couple of years.

Next Steps:

For T2 Biosystems, I've put together three essential factors you should look at:

  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 TTOO 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 TTOO is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of TTOO? 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 editorial-team@simplywallst.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.