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Riot Blockchain, Inc.'s (NASDAQ:RIOT) Sole Analyst Just Made A Substantial Upgrade To Their Forecasts

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Shareholders in Riot Blockchain, Inc. (NASDAQ:RIOT) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Investors have been pretty optimistic on Riot Blockchain too, with the stock up 76% to US$7.23 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

After the upgrade, the sole analyst covering Riot Blockchain is now predicting revenues of US$53m in 2021. If met, this would reflect a sizeable improvement in sales compared to the last 12 months. Losses are expected to turn into profits real soon, with the analyst forecasting US$0.02 in per-share earnings. Yet before this consensus update, the analyst had been forecasting revenues of US$45m and losses of US$0.26 per share in 2021. It looks like there's been a definite improvement in business conditions, with a revenue upgrade supposed to lead to profitability sooner than previously forecast.

Check out our latest analysis for Riot Blockchain

earnings-and-revenue-growth
earnings-and-revenue-growth

With these upgrades, we're not surprised to see that the analyst has lifted their price target 114% to US$7.50 per share.

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. The analyst is definitely expecting Riot Blockchain's growth to accelerate, with the forecast 6x growth ranking favourably alongside historical growth of 60% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Riot Blockchain is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that the consensus now expects Riot Blockchain to become profitable next year. 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, Riot Blockchain could be worth investigating further.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 5 potential warning signs with Riot Blockchain, including recent substantial insider selling. For more information, you can click through to our platform to learn more about this and the 4 other warning signs 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.