In September 2017, Corcept Therapeutics Incorporated (NASDAQ:CORT) announced its latest earnings update, which showed that the company finally turned profitable after negative earnings on average over the past couple of years. Today I want to provide a brief commentary on how market analysts view Corcept Therapeutics’s earnings growth outlook over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in. Check out our latest analysis for Corcept Therapeutics
Market analysts’ prospects for the coming year seems optimistic, with earnings growth more than doubling. Earnings continue to grow strongly in the next couple of years, finally arriving at $187.7M in 2020.
Even though it’s helpful to understand the growth each year relative to today’s value, it may be more valuable estimating the rate at which the business is growing every year, on average. The benefit of this method is that it ignores near term flucuations and accounts for the overarching direction of Corcept Therapeutics’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve inserted 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 31.71%. This means, we can anticipate Corcept Therapeutics will grow its earnings by 31.71% every year for the next couple of years.
Next Steps:
For Corcept Therapeutics, I’ve compiled three pertinent aspects you should further examine:
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 CORT 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 CORT is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CORT? 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 pass 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.