Market Sentiment Around Loss-Making Applied Blockchain, Inc. (NASDAQ:APLD)

With the business potentially at an important milestone, we thought we'd take a closer look at Applied Blockchain, Inc.'s (NASDAQ:APLD) future prospects. Applied Blockchain, Inc. engages in crypto mining and co-hosting operations. With the latest financial year loss of US$568k and a trailing-twelve-month loss of US$18m, the US$101m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Applied Blockchain will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Applied Blockchain

Consensus from 6 of the American Software analysts is that Applied Blockchain is on the verge of breakeven. They anticipate the company to incur a final loss in 2023, before generating positive profits of US$96m in 2024. Therefore, the company is expected to breakeven roughly 2 years from now. 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 72% is expected, which is extremely buoyant. 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 Applied Blockchain given that this is a high-level summary, however, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that Applied Blockchain 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 Applied Blockchain, so if you are interested in understanding the company at a deeper level, take a look at Applied Blockchain's company page on Simply Wall St. We've also put together a list of key factors you should further research:

1. Valuation: What is Applied Blockchain worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Applied Blockchain is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Applied Blockchain’s board and the CEO’s background.
3. 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.