Esperion Therapeutics, Inc. (NASDAQ:ESPR): Is It A Good Long Term Opportunity?

Esperion Therapeutics, Inc.’s (NASDAQ:ESPR) most recent earnings update in December 2018 showed company earnings became less negative compared to the previous year’s level as a result of recent tailwinds Investors may find it useful to understand how market analysts predict Esperion Therapeutics’s earnings growth trajectory over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

View our latest analysis for Esperion Therapeutics

Analysts’ expectations for this coming year seems optimistic, with earnings becoming less negative, generating -US$101.8m in 2020. However, earnings are expected to fall off in the following year, before bouncing back up again to -US$130.4m in 2022.

NasdaqGM:ESPR Past and Future Earnings, March 8th 2019
NasdaqGM:ESPR Past and Future Earnings, March 8th 2019

Even though it’s useful to be aware of the rate of growth year by year relative to today’s figure, it may be more beneficial to determine the rate at which the company is moving every year, on average. The pro of this technique is that we can get a bigger picture of the direction of Esperion Therapeutics’s earnings trajectory over the long run, irrespective of near term fluctuations, fluctuate up and down. 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 48%. This means, we can anticipate Esperion Therapeutics will grow its earnings by 48% every year for the next few years.

Next Steps:

For Esperion Therapeutics, I’ve put together three key aspects you should further research:

  1. 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.
  2. Valuation: What is ESPR 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 ESPR is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ESPR? 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 editorial-team@simplywallst.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.