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With the business potentially at an important milestone, we thought we'd take a closer look at Riot Blockchain, Inc.'s (NASDAQ:RIOT) future prospects. Riot Blockchain, Inc., together with its subsidiaries, focuses on building, supporting, and operating Blockchain technologies ecosystem. With the latest financial year loss of US$20m and a trailing-twelve-month loss of US$20m, the US$4.8b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Riot Blockchain's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
According to some industry analysts covering Riot Blockchain, breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$48m in 2021. So, the company is predicted to breakeven approximately a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 198%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Riot Blockchain given that this is a high-level summary, but, bear 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. The company has managed its capital judiciously, with debt making up of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are key fundamentals of Riot Blockchain which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Riot Blockchain, take a look at Riot Blockchain's company page on Simply Wall St. We've also compiled a list of essential factors you should look at:
Historical Track Record: What has Riot Blockchain's 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 Blockchain's 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.
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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