In December 2017, Range Resources Corporation (NYSE:RRC) released its latest earnings announcement, which confirmed that the company 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 perceive Range Resources’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. Check out our latest analysis for Range Resources

Analysts’ expectations for this coming year seems pessimistic, with earnings decreasing by a double-digit -24.05%. Over the medium term, earnings are expected to continue to be below today’s level, with a decline of -14.67% in 2020, eventually reaching US$281.08M in 2021.

Although it’s helpful to be aware of the rate of growth each year relative to today’s figure, it may be more insightful evaluating the rate at which the business is moving on average every year. The benefit of this approach is that we can get a better picture of the direction of Range Resources’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 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 6.43%. This means, we can expect Range Resources will grow its earnings by 6.43% every year for the next couple of years.

Next Steps:

For Range Resources, there are three pertinent aspects you should further research:

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 RRC 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 RRC is currently mispriced by the market.

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