Loss-Making Riot Platforms, Inc. (NASDAQ:RIOT) Expected To Breakeven In The Medium-Term
Riot Platforms, Inc. (NASDAQ:RIOT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Riot Blockchain, Inc., together with its subsidiaries, focuses on bitcoin mining operations in North America. The company’s loss has recently broadened since it announced a US$7.9m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$373m, moving it further away from breakeven. As path to profitability is the topic on Riot Platforms' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Check out our latest analysis for Riot Platforms
Consensus from 9 of the American Software analysts is that Riot Platforms is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$10m in 2024. Therefore, the company is expected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 123% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of Riot Platforms' upcoming projects, however, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one aspect worth mentioning. Riot Platforms currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Riot Platforms, so if you are interested in understanding the company at a deeper level, take a look at Riot Platforms' company page on Simply Wall St. We've also put together a list of important aspects you should further examine:
Historical Track Record: What has Riot Platforms' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Riot Platforms' board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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