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Shareholders in CleanSpark, Inc. (NASDAQ:CLSK) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance. CleanSpark has also found favour with investors, with the stock up a whopping 38% to US$15.95 over the past week. Could this upgrade be enough to drive the stock even higher?
Following the upgrade, the most recent consensus for CleanSpark from its lone analyst is for revenues of US$29m in 2021 which, if met, would be a substantial 176% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 95% to US$0.22. Yet before this consensus update, the analyst had been forecasting revenues of US$20m and losses of US$0.39 per share in 2021. So there's been quite a change-up of views after the recent consensus updates, with the analyst making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.
The consensus price target rose 33% to US$24.00, with the analyst encouraged by the higher revenue and lower forecast losses for next year.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that CleanSpark's rate of growth is expected to accelerate meaningfully, with the forecast 176% revenue growth noticeably faster than its historical growth of 81% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that CleanSpark is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analyst reduced their loss per share estimates for next year, reflecting increased optimism around CleanSpark's prospects. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at CleanSpark.
The covering analyst is clearly in love with CleanSpark at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as major dilution from new stock issuance in the past year. For more information, you can click through to our platform to learn more about this and the 1 other warning sign we've identified .
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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