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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. The analyst greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.
Following the upgrade, the latest consensus from CleanSpark's single analyst is for revenues of US$49m in 2021, which would reflect a major 337% improvement in sales compared to the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of US$0.13 per share this year. Yet prior to the latest estimates, the analyst had been forecasting revenues of US$28m and losses of US$0.19 per share in 2021. So we can see that this has sparked a pretty clear upgrade to expectations, with higher revenues anticipated to lead to profit sooner than previously forecast.
It will come as no surprise to learn that the analyst has increased their price target for CleanSpark 108% to US$50.00 on the back of these upgrades.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that CleanSpark's rate of growth is expected to accelerate meaningfully, with the forecast 3x revenue growth noticeably faster than its historical growth of 96% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect CleanSpark to grow faster than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that there is now an expectation for CleanSpark to become profitable this year, compared to previous expectations of a loss. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, CleanSpark could be worth investigating further.
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 flag we've identified .
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks 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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