Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
The most recent earnings update PureTech Health plc’s (LON:PRTC) released in April 2019 revealed tough times for the business, with earnings reversing into losses due to recent headwinds. Today I want to provide a brief commentary on how market analysts predict PureTech Health’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.
Market analysts’ consensus outlook for this coming year seems relatively subdued, with earnings continuing to flop around in the negative territory, reaching -US$42.1m in 2020. However, earnings are expected to move into an upward direction, generating -US$49.5m in 2021, and -US$58.8m in 2022.
Although it’s helpful to understand the growth year by year relative to today’s figure, it may be more insightful determining the rate at which the business is moving on average every year. The benefit of this technique is that it ignores near term flucuations and accounts for the overarching direction of PureTech Health’s earnings trajectory over time, be more volatile. To calculate this rate, I put 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 -13%. This means that, we can anticipate PureTech Health will chip away at a rate of -13% every year for the next few years.
For PureTech Health, there are three fundamental factors 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 PRTC’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 PRTC? 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 firstname.lastname@example.org. 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.