Market Sentiment Around Loss-Making Iris Energy Limited (NASDAQ:IREN)

With the business potentially at an important milestone, we thought we'd take a closer look at Iris Energy Limited's (NASDAQ:IREN) future prospects. Iris Energy Limited owns and operates bitcoin mining data centers. The US$2.4b market-cap company posted a loss in its most recent financial year of US$172m and a latest trailing-twelve-month loss of US$8.8m shrinking the gap between loss and breakeven. The most pressing concern for investors is Iris Energy's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Iris Energy

Iris Energy is bordering on breakeven, according to the 7 American Software analysts. They expect the company to post a final loss in 2024, before turning a profit of US$154m in 2025. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 132% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Iris Energy's growth isn’t the focus of this broad overview, but, take into account that by and large 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. Iris Energy currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of Iris Energy to cover in one brief article, but the key fundamentals for the company can all be found in one place – Iris Energy's company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:

1. Valuation: What is Iris Energy 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 Iris Energy 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 Iris Energy’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.

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