Invitae Corporation’s (NYSE:NVTA) most recent earnings announcement in December 2018 confirmed company earnings became less negative compared to the previous year’s level – great news for investors Below, I’ve laid out key growth figures on how market analysts predict Invitae’s earnings growth trajectory over the next couple of 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.
Market analysts’ consensus outlook for this coming year seems relatively muted, with earnings continuing to flop around in the negative territory, reaching -US$138.0m in 2020. Moreover, earnings are expected to fall further in the following year, decreasing to -US$82.8m in 2021 and -US$48.7m in 2022.
Although it is helpful to be aware of the growth each year relative to today’s level, it may be more insightful to gauge the rate at which the earnings are moving on average every year. The benefit of this approach is that we can get a better picture of the direction of Invitae’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve inserted 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 25%. This means that, we can presume Invitae will grow its earnings by 25% every year for the next couple of years.
For Invitae, I’ve put together three important aspects you should further examine:
- 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 NVTA 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 NVTA is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of NVTA? 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.