Analysts Just Shipped A Substantial Upgrade To Their Riot Blockchain, Inc. (NASDAQ:RIOT) Estimates

Riot Blockchain, Inc. (NASDAQ:RIOT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's 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. The stock price has risen 6.4% to US$36.21 over the past week, suggesting investors are becoming more optimistic. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the upgrade, the most recent consensus for Riot Blockchain from its three analysts is for revenues of US$220m in 2021 which, if met, would be a sizeable increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting US$0.90 in per-share earnings. Previously, the analysts had been modelling revenues of US$179m and earnings per share (EPS) of US$0.69 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for Riot Blockchain

With these upgrades, we're not surprised to see that the analysts have lifted their price target 9.4% to US$46.33 per share. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Riot Blockchain analyst has a price target of US$44.00 per share, while the most pessimistic values it at US$40.00. This is a very narrow spread of estimates, implying either that Riot Blockchain is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Riot Blockchain's rate of growth is expected to accelerate meaningfully, with the forecast 12x annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 64% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Riot Blockchain to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster 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.

Analysts are definitely bullish on Riot Blockchain, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including recent substantial insider selling. For more information, you can click through to our platform to learn more about this and the 2 other flags 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.

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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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