TeraWulf Inc. (NASDAQ:WULF) Released Earnings Last Week And Analysts Lifted Their Price Target To US$6.57

TeraWulf Inc. (NASDAQ:WULF) shareholders are probably feeling a little disappointed, since its shares fell 7.2% to US$3.60 in the week after its latest quarterly results. It was a pretty bad result overall; while revenues were in line with expectations at US$36m, statutory losses exploded to US$0.03 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on TeraWulf after the latest results.

View our latest analysis for TeraWulf

Following the latest results, TeraWulf's six analysts are now forecasting revenues of US$153.7m in 2024. This would be a substantial 28% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 30% to US$0.094. Before this earnings announcement, the analysts had been modelling revenues of US$157.9m and losses of US$0.072 per share in 2024. So it's pretty clear the analysts have mixed opinions on TeraWulf after this update; revenues were downgraded and per-share losses expected to increase.

The average price target lifted 7.8% to US$6.57, clearly signalling that the weaker revenue and EPS outlook are not expected to weigh on the stock over the longer term. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on TeraWulf, with the most bullish analyst valuing it at US$10.00 and the most bearish at US$3.00 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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. We would highlight that TeraWulf's revenue growth is expected to slow, with the forecast 63% annualised growth rate until the end of 2024 being well below the historical 197% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% per year. So it's pretty clear that, while TeraWulf's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for TeraWulf going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - TeraWulf has 4 warning signs (and 3 which are a bit concerning) we think you should know about.

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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.