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TeraWulf Inc. (NASDAQ:WULF) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. TeraWulf Inc., together with its subsidiaries, operates as a digital asset technology company in the United States. With the latest financial year loss of US$60m and a trailing-twelve-month loss of US$74m, the US$218m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which TeraWulf will turn a profit, with the big question being “when will the company 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 TeraWulf, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$39m in 2022. The company is therefore projected to breakeven around 12 months from now or less. How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 37% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving TeraWulf's growth isn’t the focus of this broad overview, though, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with TeraWulf is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in TeraWulf's case is 83%. Note that a higher debt obligation increases the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on TeraWulf, so if you are interested in understanding the company at a deeper level, take a look at TeraWulf's company page on Simply Wall St. We've also compiled a list of important aspects you should look at:
Historical Track Record: What has TeraWulf'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 TeraWulf'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.
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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.