The latest earnings release HTG Molecular Diagnostics, Inc.’s (NASDAQ:HTGM) announced in December 2018 showed that losses became smaller relative to the prior year’s level as a result of recent tailwinds Below is my commentary, albeit very simple and high-level, on how market analysts view HTG Molecular Diagnostics’s earnings growth outlook over the next couple of 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 the upcoming year seems relatively unexciting, with earnings continuing to flop around in the negative territory, reaching -US$18.0m in 2020. Additionally, earnings are predicted to fall further in the following year, before bouncing back up again to -US$16.8m in 2022.
Although it’s helpful to understand the growth rate each year relative to today’s level, it may be more valuable to evaluate the rate at which the business is moving on average every year. The pro of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of HTG Molecular Diagnostics’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 -0.3%. This means that, we can anticipate HTG Molecular Diagnostics will chip away at a rate of -0.3% every year for the next few years.
For HTG Molecular Diagnostics, there are three fundamental aspects 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 HTGM’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 HTGM? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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