Will Vital Therapies Inc’s (NASDAQ:VTL) Earnings Grow In The Next Couple Of Years?
Vital Therapies Inc’s (NASDAQ:VTL) latest earnings announcement in December 2017 showed 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 perceive Vital Therapies’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. See our latest analysis for Vital Therapies
Market analysts’ prospects for this coming year seems pessimistic, with earnings becoming even more negative, arriving at -US$60.66M in 2019. In addition, earnings are predicted to fall off in the following year, before bouncing back up again to -US$68.05M in 2021.
While it is informative understanding the rate of growth each year relative to today’s value, it may be more valuable estimating the rate at which the company is growing every year, on average. The pro of this approach is that it ignores near term flucuations and accounts for the overarching direction of Vital Therapies’s earnings trajectory over time, be more volatile. 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 23.04%. This means that, we can assume Vital Therapies will grow its earnings by 23.04% every year for the next couple of years.
Next Steps:
For Vital Therapies, there are three fundamental aspects you should further research:
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.
Future Earnings: How does VTL’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.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of VTL? 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.
