Yahoo Finance TeraWulf Inc. (NASDAQ:WULF) Is Expected To Breakeven In The Near Future
TeraWulf Inc. (NASDAQ:WULF) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. TeraWulf Inc., together with its subsidiaries, operates as a digital asset technology company in the United States. With the latest financial year loss of US$60m and a trailing-twelve-month loss of US$109m, the US$114m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which TeraWulf 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.
See our latest analysis for TeraWulf
Expectations from some of the American Software analysts is that TeraWulf is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of US$27m in 2023. So, the company is predicted to breakeven just over a year from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 103%, which signals high confidence from analysts. 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 TeraWulf's upcoming projects, though, keep in mind 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 issue worth mentioning. TeraWulf currently has a debt-to-equity ratio of 105%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. 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 TeraWulf, so if you are interested in understanding the company at a deeper level, take a look at TeraWulf's company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:
Historical Track Record: What has TeraWulf'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.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on TeraWulf'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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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