Time To Worry? Analysts Just Downgraded Their TeraWulf Inc. (NASDAQ:WULF) Outlook

The analysts covering TeraWulf Inc. (NASDAQ:WULF) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the current consensus from TeraWulf's eight analysts is for revenues of US$250m in 2025 which - if met - would reflect a substantial 78% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 88% to US$0.023. Previously, the analysts had been modelling revenues of US$287m and earnings per share (EPS) of US$0.13 in 2025. There looks to have been a major change in sentiment regarding TeraWulf's prospects, with a substantial drop in revenues and the analysts now forecasting a loss instead of a profit.

See our latest analysis for TeraWulf

The consensus price target fell 7.9% to US$9.06, implicitly signalling that lower earnings per share are a leading indicator for TeraWulf's valuation.

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 can infer from the latest estimates that forecasts expect a continuation of TeraWulf'shistorical trends, as the 78% annualised revenue growth to the end of 2025 is roughly in line with the 97% annual revenue growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 12% annually. So it's pretty clear that TeraWulf is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest low-light for us was that the forecasts for TeraWulf dropped from profits to a loss this year. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of TeraWulf.

That said, the analysts might have good reason to be negative on TeraWulf, given major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 1 other flag 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 downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.