What Should You Know About Altius Minerals Corporation’s (TSE:ALS) Earnings Trajectory?

Altius Minerals Corporation’s (TSE:ALS) announced its latest earnings update in December 2017, which indicated that the business finally turned profitable after delivering losses on average over the past few years. Below is a brief commentary on my key takeaways on how market analysts view Altius Minerals’s earnings growth outlook 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.

View our latest analysis for Altius Minerals

Analysts’ outlook for this coming year seems pessimistic, with earnings falling by a double-digit -25%. In the following year, earnings begins to improve, generating CA$26m by 2021.

TSX:ALS Future Profit December 9th 18

While it’s informative understanding the growth rate year by year relative to today’s value, it may be more valuable evaluating the rate at which the earnings are rising or falling on average every year. The advantage of this technique is that we can get a bigger picture of the direction of Altius Minerals’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 -0.7%. This means, we can presume Altius Minerals will chip away at a rate of -0.7% every year for the next couple of years.

Next Steps:

For Altius Minerals, there are three relevant factors 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 ALS 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 ALS is currently mispriced by the market.

3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ALS? 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.