Lannett Company Inc (NYSE:LCI): What Are The Future Prospects?

Based on Lannett Company Inc’s (NYSE:LCI) earnings update in March 2018, it seems that analyst forecasts are substantially optimistic, as a 58.3% rise in profits is expected in the upcoming year, compared with the previous 5-year average growth rate of 13.5%. By 2019, we can expect Lannett Company’s bottom line to reach US$72.5m, a jump from the current trailing-twelve-month US$45.8m. Below is a brief commentary around Lannett Company’s earnings outlook going forward, which may give you a sense of market sentiment for the company. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

View our latest analysis for Lannett Company

What can we expect from Lannett Company in the longer term?

The view from 7 analysts over the next three years is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of LCI’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
NYSE:LCI Future Profit August 28th 18
NYSE:LCI Future Profit August 28th 18
By 2021, LCI’s earnings should reach -US$594.4k, from current levels of -US$581.0k, resulting in an annual growth rate of 6.7%. This leads to an EPS of $1.52 in the final year of projections relative to the current EPS of $-0.016. The bottom-line growth seems to be caused by cost-cutting initiatives, since top-line is predicted to rise at a slower pace than earnings. In 2021, LCI’s profit margin will have expanded from -0.09% to -0.1%.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Lannett Company, I’ve compiled three fundamental aspects you should look at:

  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 Lannett Company 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 Lannett Company is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Lannett Company? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.