Analysts Have Been Trimming Their Riot Platforms, Inc. (NASDAQ:RIOT) Price Target After Its Latest Report

Simply Wall St ·  11/11/2023 02:41

Riot Platforms, Inc. (NASDAQ:RIOT) just released its latest quarterly report and things are not looking great. Earnings missed the mark badly, with revenues of US$52m falling 23% short of expectations. Losses correspondingly increased, with a US$0.25 per-share statutory loss some 17% larger than what the analysts expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Riot Platforms

NasdaqCM:RIOT Earnings and Revenue Growth November 10th 2023

Taking into account the latest results, the consensus forecast from Riot Platforms' ten analysts is for revenues of US$479.1m in 2024. This reflects a huge 83% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 43% to US$0.79. Before this latest report, the consensus had been expecting revenues of US$490.0m and US$0.70 per share in losses. While next year's revenue estimates dropped there was also a notable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The average price target fell 7.3% to US$16.26, implicitly signalling that lower earnings per share are a leading indicator for Riot Platforms' 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. There are some variant perceptions on Riot Platforms, with the most bullish analyst valuing it at US$22.00 and the most bearish at US$7.50 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Riot Platforms'historical trends, as the 62% annualised revenue growth to the end of 2024 is roughly in line with the 62% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 12% annually. So although Riot Platforms is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

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. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Riot Platforms. Long-term earnings power is much more important than next year's profits. We have forecasts for Riot Platforms going out to 2025, and you can see them free on our platform here.

Even so, be aware that Riot Platforms is showing 4 warning signs in our investment analysis , 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.

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