Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Dolphin Drilling ASA’s (OB:DDASA) latest earnings announcement in December 2018 showed that losses became smaller relative to the prior year’s level – great news for investors Today I want to provide a brief commentary on how market analysts view Dolphin Drilling’s earnings growth outlook over the next couple of 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.
Market analysts’ prospects for next year seems optimistic, with earnings becoming less negative, reaching -US$240.0m in 2020. However, earnings are expected to fall off and remain flat over the next few years, generating -US$195.0m in 2022.
Although it is useful to be aware of the growth rate year by year relative to today’s value, it may be more valuable to analyze the rate at which the business is growing every year, on average. The benefit of this approach is that we can get a bigger picture of the direction of Dolphin Drilling’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate 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 38%. This means that, we can expect Dolphin Drilling will grow its earnings by 38% every year for the next few years.
For Dolphin Drilling, there are three relevant factors 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.
- Future Earnings: How does DDASA’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 DDASA? 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.