With the business potentially at an important milestone, we thought we'd take a closer look at CleanSpark, Inc.'s (NASDAQ:CLSK) future prospects. CleanSpark, Inc. provides energy software and control technology solutions worldwide. The US$483m market-cap company posted a loss in its most recent financial year of US$23m and a latest trailing-twelve-month loss of US$16m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which CleanSpark will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Consensus from 2 of the American Software analysts is that CleanSpark is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$16m in 2021. The company is therefore projected to breakeven around a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 37% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of CleanSpark's upcoming projects, however, 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. CleanSpark currently has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are key fundamentals of CleanSpark which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at CleanSpark, take a look at CleanSpark's company page on Simply Wall St. We've also put together a list of key aspects you should further examine:
- Valuation: What is CleanSpark 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 CleanSpark is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on CleanSpark’s board and the CEO’s background.
- 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. 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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