The latest earnings release Editas Medicine, Inc.’s ( NASDAQ:EDIT ) announced in December 2018 showed that losses became smaller relative to the prior year’s level as a result of recent tailwinds Below is a brief commentary on my key takeaways on how market analysts predict Editas Medicine’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.
Analysts’ expectations for the upcoming year seems pessimistic, with earnings becoming even more negative, generating -US$137.8m in 2020. However, earnings should move into an upward direction, reaching -US$162.5m in 2021, before plateauing to similar levels in 2022.
While it is useful to understand the growth rate each year relative to today’s figure, it may be more insightful to analyze the rate at which the company is rising or falling every year, on average. The benefit of this approach is that it ignores near term flucuations and accounts for the overarching direction of Editas Medicine’s earnings trajectory over time, be more volatile. 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 -9.1%. This means, we can presume Editas Medicine will chip away at a rate of -9.1% every year for the next few years.
For Editas Medicine, I’ve compiled three key factors 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.
- Management :Have insiders been ramping up their shares to take advantage of the market’s sentiment for EDIT’s future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of EDIT? 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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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org . 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.