Trulieve Cannabis Corp.’s (CNSX:TRUL) most recent earnings update in December 2018 revealed that the company gained from a significant tailwind, more than doubling its earnings from the prior year. Today I want to provide a brief commentary on how market analysts perceive Trulieve Cannabis’s earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. 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.
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Analysts’ expectations for this coming year seems optimistic, with earnings rising by a significant 67%. This strong growth in earnings is expected to continue, bringing the bottom line up to US$141m by 2022.
Even though it is informative understanding the rate of growth each year relative to today’s value, it may be more valuable determining the rate at which the company is rising or falling on average every year. The advantage of this method is that we can get a better picture of the direction of Trulieve Cannabis’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 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 34%. This means, we can presume Trulieve Cannabis will grow its earnings by 34% every year for the next few years.
For Trulieve Cannabis, I’ve compiled three fundamental aspects you should further examine:
- 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.
- Valuation: What is TRUL 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 TRUL is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of TRUL? 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 email@example.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.