Riot Platforms, Inc. Just Reported A Surprise Profit And Analysts Updated Their Estimates

It's been a sad week for Riot Platforms, Inc. (NASDAQ:RIOT), who've watched their investment drop 14% to US$10.30 in the week since the company reported its quarterly result. Revenues of US$79m missed forecasts by 18%, but Riot Platforms managed to deliver a surprise (statutory) profit, with earnings per share of US$0.81 a decent improvement on the loss that the analysts were predicting. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Riot Platforms

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Following the latest results, Riot Platforms' twelve analysts are now forecasting revenues of US$484.0m in 2024. This would be a substantial 69% improvement in revenue compared to the last 12 months. Earnings are expected to tip over into lossmaking territory, with the analysts forecasting statutory losses of -US$0.46 per share in 2024. Before this latest report, the consensus had been expecting revenues of US$492.7m and US$0.56 per share in losses. Although the revenue estimates have not really changed Riot Platforms'future looks a little different to the past, with a notable improvement in the loss per share forecasts in particular.

There's been no major changes to the consensus price target of US$18.96, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Riot Platforms at US$25.50 per share, while the most bearish prices it at US$13.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Riot Platforms' past performance and to peers in the same industry. It's clear from the latest estimates that Riot Platforms' rate of growth is expected to accelerate meaningfully, with the forecast 101% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 53% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Riot Platforms to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Riot Platforms analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Riot Platforms has 3 warning signs (and 1 which shouldn't be ignored) 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.