CRISPR Therapeutics AG’s (NASDAQ:CRSP) announced its latest earnings update in December 2018, which signalled company earnings became less negative compared to the previous year’s level as a result of recent tailwinds Below is a brief commentary on my key takeaways on how market analysts perceive CRISPR Therapeutics’s earnings growth trajectory 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 the coming year seems pessimistic, with earnings becoming even more negative, arriving at -US$191.6m in 2020. However, earnings should move into an upward direction, generating -US$221.9m in 2021, and -US$264.7m in 2022.
Even though it is useful to understand the growth rate year by year relative to today’s level, it may be more valuable determining the rate at which the company is growing every year, on average. The pro of this technique is that we can get a better picture of the direction of CRISPR Therapeutics’s earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. To calculate this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is -13%. This means that, we can anticipate CRISPR Therapeutics will chip away at a rate of -13% every year for the next couple of years.
For CRISPR Therapeutics, there are three pertinent 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 CRSP’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 CRSP? 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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