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We feel now is a pretty good time to analyse CryptoStar Corp.'s (CVE:CSTR) business as it appears the company may be on the cusp of a considerable accomplishment. CryptoStar Corp. engages in cryptocurrency mining operations with data centers in Canada and the United States. With the latest financial year loss of US$5.2m and a trailing-twelve-month loss of US$7.2m, the CA$74m market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on CryptoStar's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to some industry analysts covering CryptoStar, breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$6.2m in 2022. Therefore, the company is expected to breakeven just over a year from today. 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 186%, 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 CryptoStar's upcoming projects, but, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 6.8% 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.
There are too many aspects of CryptoStar to cover in one brief article, but the key fundamentals for the company can all be found in one place – CryptoStar's company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:
Historical Track Record: What has CryptoStar'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 CryptoStar'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.