Marathon Digital Holdings, Inc. (NASDAQ:MARA) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Marathon Digital Holdings, Inc. operates as a digital asset technology company that mines cryptocurrencies with a focus on the blockchain ecosystem and the generation of digital assets in United States. The company’s loss has recently broadened since it announced a US$36m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$215m, moving it further away from breakeven. As path to profitability is the topic on Marathon Digital Holdings' 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.
Marathon Digital Holdings is bordering on breakeven, according to the 8 American Software analysts. They expect the company to post a final loss in 2022, before turning a profit of US$103m in 2023. Therefore, the company is expected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 95% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Marathon Digital Holdings given that this is a high-level summary, however, keep in mind that by and large 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 issue worth mentioning. Marathon Digital Holdings currently has a debt-to-equity ratio of 116%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Marathon Digital Holdings, so if you are interested in understanding the company at a deeper level, take a look at Marathon Digital Holdings' company page on Simply Wall St. We've also put together a list of key factors you should further examine:
- Valuation: What is Marathon Digital Holdings 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 Marathon Digital Holdings 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 Marathon Digital Holdings’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.
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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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
