Five Prime Therapeutics, Inc.'s (NASDAQ:FPRX) latest earnings update in December 2018 confirmed that losses became smaller relative to the prior year's level as a result of recent tailwinds Below, I've laid out key numbers on how market analysts view Five Prime 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 Five Prime Therapeutics
Analysts' outlook for the upcoming year seems relatively subdued, with earnings continuing to flop around in the negative territory, generating -US$134.3m in 2020. Additionally, earnings should fall further in the following year, falling to -US$113.2m in 2021 and -US$108.3m in 2022.
Even though it is useful to understand the growth year by year relative to today’s figure, it may be more insightful gauging the rate at which the business is moving every year, on average. The pro of this approach is that it ignores near term flucuations and accounts for the overarching direction of Five Prime Therapeutics's earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I put 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 19%. This means, we can anticipate Five Prime Therapeutics will grow its earnings by 19% every year for the next couple of years.
Next Steps:
For Five Prime Therapeutics, I've compiled three key aspects 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 FPRX 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 FPRX is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of FPRX? 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.