With the business potentially at an important milestone, we thought we'd take a closer look at Digihost Technology Inc.'s (CVE:DGHI) future prospects. Digihost Technology Inc. operates as a blockchain technology company. The CA$116m market-cap company’s loss lessened since it announced a US$5.2m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$4.5m, as it approaches breakeven. As path to profitability is the topic on Digihost Technology's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
View our latest analysis for Digihost Technology
According to some industry analysts covering Digihost Technology, breakeven is near. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$7.7m in 2021. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 149%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, we won’t go into details of Digihost Technology's upcoming projects, however, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 0.1% 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:
This article is not intended to be a comprehensive analysis on Digihost Technology, so if you are interested in understanding the company at a deeper level, take a look at Digihost Technology's company page on Simply Wall St. We've also compiled a list of essential factors you should further research:
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Historical Track Record: What has Digihost Technology's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Digihost Technology's board and the CEO’s background.
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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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