What You Need To Know About The TeraWulf Inc. (NASDAQ:WULF) Analyst Downgrade Today

Market forces rained on the parade of TeraWulf Inc. (NASDAQ:WULF) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the most recent consensus for TeraWulf from its three analysts is for revenues of US$72m in 2023 which, if met, would be a huge 77% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 34% to US$0.30 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$84m and losses of US$0.22 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for TeraWulf

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that TeraWulf's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 215% growth on an annualised basis. This is compared to a historical growth rate of 2,423% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% annually. Even after the forecast slowdown in growth, it seems obvious that TeraWulf is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on TeraWulf after today.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with TeraWulf, including major dilution from new stock issuance in the past year. For more information, you can click here to discover this and the 1 other concern we've identified.

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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.