Riot Blockchain, Inc.'s (NASDAQ:RIOT) Has Found A Path To Profitability

By
Simply Wall St
Published
February 10, 2021
NasdaqCM:RIOT

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. The US$2.7b market-cap company’s loss lessened since it announced a US$20m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$20m, as it approaches breakeven. As path to profitability is the topic on Riot Blockchain's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Riot Blockchain

Riot Blockchain is bordering on breakeven, according to some American Software analysts. 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.

earnings-per-share-growth
NasdaqCM:RIOT Earnings Per Share Growth February 10th 2021

We're not going to go through company-specific developments for Riot Blockchain given that this is a high-level summary, however, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital prudently, 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.

Next Steps:

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 pertinent aspects you should further examine:

  1. 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.
  2. 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.
  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. 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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Simply Wall St is a financial technology startup focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of equity analysts with a public, market-beating track record. Learn more about the team behind Simply Wall St.