When can we expect a profit from Applied Blockchain, Inc. (NASDAQ:APLD)?

We feel that now is a pretty good time to analyze Applied Blockchain, Inc.’s (NASDAQ:APLD) business as it stands, the company may be on its way to a significant achievement. Applied Blockchain, Inc. designs, develops and operates data centers in North America. The company’s loss of US$179 million narrowed since it announced a loss of US$22 million for the full financial year, compared with a trailing-twelve-month loss of US$13 million as it nears breakeven. Many investors wonder how much Applied Blockchain will make a profit, with the big question being “when will the company break even?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

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Applied Blockchain is on the verge of breakeven, according to the 6 US software analysts. They expect the company to post a final loss in 2023, before turning a profit of $51 million in 2024. The company is therefore estimated to break even about 2 years from now. How fast must the company grow each year to break even by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 111% year-over-year on average, signaling high confidence from analysts. If this rate turns out to be too aggressive, the company could become profitable much later than analysts predict.

The underlying developments driving Applied Blockchain’s growth are not the focus of this broad overview, but consider that a high projected growth rate is mostly not unusual for a company currently undergoing an investment period.

Before we conclude, there is one aspect worth mentioning. The company has managed its capital sensibly, with debt making up 19% of equity. This means that the company has mainly financed its operations from equity, and its low debt obligations reduce the risk surrounding investment in the loss-making company.

Next steps:

This article is not intended to be a comprehensive analysis of Applied Blockchain, so if you are interested in understanding the company on a deeper level, take a look at Applied Blockchain’s company page on Simply Wall St. We have also compiled a list of essential aspects you should look at:

1. Valuation: What is Applied Blockchain worth today? Is the future growth potential already included in the price? The intrinsic value infographic in our free research report helps visualize whether Applied Blockchain is currently mispriced by the market.
2. Management group: An experienced management team at the helm increases our confidence in the business – take a look at who sits on Applied Blockchain’s board and the CEO’s background.
3. Other high performing stocks: Are there other stocks that offer better prospects with proven results? Explore our free list of these great stocks here.

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This article by Simply Wall St is general. We provide commentary based on historical data and analyst forecasts only using an objective methodology, and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares, and does not take into account your goals or your financial situation. We aim to provide you with long-term focused analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.