In December 2018, Chimerix, Inc. (NASDAQ:CMRX) announced its latest earnings update, which showed company earnings became less negative compared to the previous year’s level – great news for investors Below is my commentary, albeit very simple and high-level, on how market analysts perceive Chimerix’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 next year seems relatively muted, with earnings continuing to flop around in the negative territory, arriving at -US$75.2m in 2020. Additionally, earnings are expected to fall further in the following year, before bouncing back up again to -US$71.7m in 2022.
Although it’s useful to be aware of the growth rate each year relative to today’s value, it may be more beneficial estimating the rate at which the business is growing every year, on average. The pro of this method is that we can get a better picture of the direction of Chimerix’s earnings trajectory over the long run, irrespective of near term fluctuations, 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 Chimerix will grow its earnings by 13% every year for the next couple of years.
For Chimerix, there are three key 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 CMRX’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 CMRX? 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.