Genscript Biotech Corporation (HKG:1548): Poised For Long-Term Success?

The latest earnings announcement Genscript Biotech Corporation’s (SEHK:1548) released in December 2017 suggested that the business endured a minor headwind with earnings declining from US$26.17M to US$26.12M, a change of -0.18%. Below is my commentary, albeit very simple and high-level, on how market analysts predict Genscript Biotech’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. Check out our latest analysis for Genscript Biotech

Analysts’ expectations for this coming year seems buoyant, with earnings increasing by a robust 45.74%. This growth seems to continue into the following year with rates arriving at double digit 93.90% compared to today’s earnings, and finally hitting US$57.93M by 2021.

SEHK:1548 Future Profit May 12th 18
SEHK:1548 Future Profit May 12th 18

Although it is useful to be aware of the growth year by year relative to today’s value, it may be more valuable evaluating the rate at which the company is moving on average every year. The benefit of this method is that we can get a bigger picture of the direction of Genscript Biotech’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 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 25.01%. This means that, we can expect Genscript Biotech will grow its earnings by 25.01% every year for the next couple of years.

Next Steps:

For Genscript Biotech, I’ve put together three essential aspects you should further examine:

  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 1548 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 1548 is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of 1548? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!