WELL: New major risk - Revenue and earnings growthI have received the following e-mail from Simply Wall St. Does anyone happen to know what they are talking about?
Earnings are forecast to decline by an average of 103% per year for the foreseeable future.
This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns.
Currently, the following risks have been identified for the company:
Major Risk
- Earnings are forecast to decline by an average of 103% per year for the foreseeable future.
Minor Risks
- Large one-off items impacting financial results.
- Shareholders have been diluted in the past year (4.9% increase in shares outstanding).