Riot Platforms Inc. (riot – Free Report) has been one of the most-watched stocks by Zacks.com visitors lately. Therefore, we recommend considering several factors that can affect a stock’s short-term performance.
Over the past month, the company’s stock has returned -10.8%, compared to a +1.6% change in the Zacks S&P 500 Composite Index. During this period, the Zacks Technology Services industry, which includes Riot Platforms, Inc., rose 0.4%. The key question here is: What is the future direction of the stock price?
While media reports and rumors about significant changes in a company’s business outlook typically trigger stock price trends and lead to immediate price movements, there are always certain fundamental factors that ultimately drive the buy-and-hold decision. Exists.
Regarding revisions to performance forecasts
At Zacks, we prioritize evaluating changes in company earnings estimates rather than focusing on anything else. This is because we believe that the fair value of a stock is determined by the present value of its future income stream.
Our analysis is fundamentally based on how the sell-side analysts covering a given stock are revising their earnings estimates to account for the latest business trends. As a company’s earnings expectations rise, so does the fair value of its stock. And when a stock’s fair value is higher than its current market price, investors tend to buy the stock, which causes the stock price to rise. For this reason, empirical research has shown that there is a strong correlation between trends in earnings forecast revisions and short-term stock price movements.
For the current quarter, Riot Platforms, Inc. is expected to post a loss of $0.20 per share, which would represent a decline of 600% from the year-ago period. The Zacks Consensus Estimate has changed +12.4% over the past 30 days.
Consensus earnings estimate for the current fiscal year is -$0.42, representing a -50% change from the prior year. Over the past 30 days, this estimate has changed by +45.2%.
Next year’s consensus earnings estimate of $0.08 represents a +117.5% change from the revenue that Riot Platforms, Inc. was expected to report a year ago. Over the past month, the estimate has changed -127.6%.
The Zacks Rank, a proprietary stock evaluation tool with an impressive, outside-audited track record of impressive results, harnesses the power of earnings estimate revisions to be a more conclusive indicator of a stock’s short-term price performance. . The magnitude of the recent consensus estimate change, along with three other factors related to the earnings estimate, has given Riot Platforms, Inc. a Zacks Rank of #3 (Hold).
The chart below shows the company’s consensus EPS estimate over the next 12 months over time.
12 months EPS
Revenue growth forecast
Earnings growth is arguably the best indicator of a company’s financial health, but nothing will happen if a company can’t grow its revenue. After all, it’s nearly impossible for a company to increase profits over a long period of time without increasing revenue. Therefore, it’s important to know a company’s earnings growth potential.
Riot Platforms, Inc.’s consensus revenue estimate for the current quarter is $94.21 Million, representing +28.6% change from the previous year. Estimates for the current and next fiscal year are $452.26 million and $772.81 million, representing changes of +61.1% and +70.9%, respectively.
Last reported results and surprising details
Riot Platforms, Inc. reported revenue of $78.83 million in its last reported quarter. This represents a +31.1% year-over-year change. EPS for the same period was $0.48, compared to -$0.07 a year ago.
The reported earnings are a surprise of -7.18% when compared to the Zacks Consensus Estimate of $84.94 million. EPS surprise was +265.52%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company has failed to beat consensus revenue estimates in any of the last four quarters.
evaluation
You cannot make efficient investment decisions without considering stock valuation. Whether a stock’s current price accurately reflects the intrinsic value of the underlying business and the company’s growth prospects is a key determinant of future stock performance.
Compare the current value of a company’s valuation multiples, such as price to earnings (P/E), price to sales (P/S), and price to cash flow (P/CF), to its own value, while also Value helps determine whether a stock is fairly valued, overvalued, or undervalued, and by comparing a company to its peers based on these parameters, you can determine whether a stock is reasonably priced. I can understand the gender.
The Zacks Value Style Score (part of the Zacks Style Scores system) pays close attention to both traditional and non-traditional valuation metrics and rates stocks from A to F, where A is better than B. , B is better than C, A is better than B, and B is better than C). ), can be very helpful in identifying whether a stock is overvalued, properly valued, or temporarily undervalued.
Riot Platforms, Inc. is rated a D on this score, indicating that it trades at a premium relative to its industry peers. Click here to see the values of some of the metrics that determined this grade.
conclusion
The facts discussed here, and many others on Zacks.com, may help you decide whether the market buzz regarding Riot Platforms, Inc. is worth paying attention to. However, his Zacks Rank #3 for the company suggests the company is likely to perform in line with the broader market. In the short term, the market.
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