How Do Analysts See Tamarack Valley Energy Ltd (TSE:TVE) Performing Over The Next Few Years?

The latest earnings release Tamarack Valley Energy Ltd’s (TSE:TVE) announced in December 2018 revealed that the business finally turned profitable after losses on average over the past few years. Below, I’ve presented key growth figures on how market analysts view Tamarack Valley Energy’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.

View our latest analysis for Tamarack Valley Energy

Analysts’ outlook for next year seems pessimistic, with earnings declining by a double-digit -22%. However, the next few years show a contrast, with earnings growth becoming positive in 2021, with the bottom line increasing to CA$45m in 2022.

TSX:TVE Past and Future Earnings, March 8th 2019
TSX:TVE Past and Future Earnings, March 8th 2019

Although it’s useful to be aware of the rate of growth year by year relative to today’s figure, it may be more valuable to evaluate the rate at which the company is moving on average every year. The benefit of this technique is that we can get a better picture of the direction of Tamarack Valley Energy’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. 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 7.9%. This means that, we can expect Tamarack Valley Energy will grow its earnings by 7.9% every year for the next couple of years.

Next Steps:

For Tamarack Valley Energy, there are three important factors you should further research:

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