Argo Blockchain plc's (LON:ARB) Profit Outlook

With the business potentially at an important milestone, we thought we'd take a closer look at Argo Blockchain plc's (LON:ARB) future prospects. Argo Blockchain plc, together with its subsidiary, Argo Blockchain Canada Holdings Inc., engages in the crypto asset mining services worldwide. The UK£30m market-cap company posted a loss in its most recent financial year of UK£869k and a latest trailing-twelve-month loss of UK£1.3m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Argo Blockchain's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Argo Blockchain

Expectations from some of the British Software analysts is that Argo Blockchain is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of UK£2.4m in 2021. Therefore, the company is expected to breakeven just over a year from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 180%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

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Underlying developments driving Argo Blockchain's growth isn’t the focus of this broad overview, though, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 1.4% 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 too many aspects of Argo Blockchain to cover in one brief article, but the key fundamentals for the company can all be found in one place – Argo Blockchain's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:

1. Valuation: What is Argo Blockchain worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Argo Blockchain is currently mispriced by the market.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Argo 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.

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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