Sientra, Inc.’s (NASDAQ:SIEN) most recent earnings update in December 2018 showed company earnings became less negative compared to the previous year’s level – great news for investors Below, I’ve laid out key numbers on how market analysts view Sientra’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.
Analysts’ expectations for this coming year seems relatively subdued, with earnings continuing to flop around in the negative territory, arriving at -US$84.4m in 2020. Additionally, earnings should fall further in the following year, dwindling to -US$69.9m in 2021 and -US$47.9m in 2022.
While it’s useful to be aware of the growth rate year by year relative to today’s figure, it may be more beneficial estimating the rate at which the business is moving every year, on average. The pro of this method is that it ignores near term flucuations and accounts for the overarching direction of Sientra’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve inserted 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 35%. This means that, we can anticipate Sientra will grow its earnings by 35% every year for the next couple of years.
For Sientra, I’ve put together three key factors you should look at:
- 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 SIEN 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 SIEN is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SIEN? 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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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.