Stock Analysis
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- NasdaqCM:RIOT
The three-year returns have been incredible for Riot Platforms (NASDAQ:RIOT) shareholders despite underlying losses increasing
For us, stock picking is in large part the hunt for the truly magnificent stocks. Not every pick can be a winner, but when you pick the right stock, you can win big. Take, for example, the Riot Platforms, Inc. (NASDAQ:RIOT) share price, which skyrocketed 851% over three years. It's also good to see the share price up 76% over the last quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report. It really delights us to see such great share price performance for investors.
The past week has proven to be lucrative for Riot Platforms investors, so let's see if fundamentals drove the company's three-year performance.
See our latest analysis for Riot Platforms
Given that Riot Platforms didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over the last three years Riot Platforms has grown its revenue at 96% annually. That's much better than most loss-making companies. In light of this attractive revenue growth, it seems somewhat appropriate that the share price has been rocketing, boasting a gain of 112% per year, over the same period. It's always tempting to take profits after a share price gain like that, but high-growth companies like Riot Platforms can sometimes sustain strong growth for many years. So we'd recommend you take a closer look at this one, or even put it on your watchlist.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
We regret to report that Riot Platforms shareholders are down 64% for the year. Unfortunately, that's worse than the broader market decline of 12%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 2% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Riot Platforms has 4 warning signs (and 1 which is a bit concerning) we think you should know about.
We will like Riot Platforms better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
What are the risks and opportunities for Riot Platforms?
Riot Platforms, Inc., together with its subsidiaries, operates as a bitcoin mining company in North America.
Rewards
Revenue is forecast to grow 27.61% per year
Risks
Has less than 1 year of cash runway
Highly volatile share price over the past 3 months
Shareholders have been diluted in the past year
Currently unprofitable and not forecast to become profitable over the next 3 years
Further research on
Riot Platforms
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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.
About NasdaqCM:RIOT
Riot Platforms
Riot Platforms, Inc., together with its subsidiaries, operates as a bitcoin mining company in North America.
Adequate balance sheet with limited growth.
