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Market Sentiment Around Loss-Making Marathon Digital Holdings, Inc. (NASDAQ:MARA)

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 US$1.3b market-cap company posted a loss in its most recent financial year of US$36m and a latest trailing-twelve-month loss of US$215m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Marathon Digital Holdings' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Marathon Digital Holdings

According to the 8 industry analysts covering Marathon Digital Holdings, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$105m in 2023. The company is therefore projected to breakeven just over a year from today. 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 signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Marathon Digital Holdings' growth isn’t the focus of this broad overview, however, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one issue worth mentioning. Marathon Digital Holdings currently has a debt-to-equity ratio of 116%. 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:

There are key fundamentals of Marathon Digital Holdings 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 Marathon Digital Holdings, take a look at Marathon Digital Holdings' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further examine:

  1. 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.

  2. 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.

  3. 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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