On Friday, Applied Blockchain Inc (NASDAQ:APLD) saw its price target lowered by Roth/MKM from the previous $13.00 to $8.00, while the firm maintained a Buy rating on the stock. The adjustment comes after the company reported results for the third fiscal quarter of 2023 that fell short of expectations. The company's performance was notably impacted by power outages and a slower-than-anticipated rollout of GPU operations.
The ongoing offline status of the Ellendale facility and the slower deployment of GPUs have been identified as factors leading to discrepancies between revenue and costs, necessitating a revision of financial models. These challenges have prompted Roth/MKM to revise their estimates downward for Applied Blockchain.
Despite the setbacks including Bitcoin mining outages, the pace of GPU ramp-up, and the absence of a new anchor tenant agreement, Roth/MKM noted a positive development in the company's Letter of Intent (LOI) to provide 400MW to a U.S. Hyperscaler for high-performance computing (HPC). This LOI is seen as a significant encouraging factor for Applied Blockchain's future prospects.
However, the firm indicated that securing financing is a critical step that needs to be addressed before there can be an upward movement in the company's share price. The revised price target of $8 reflects these various factors influencing Applied Blockchain's current business trajectory.
InvestingPro Insights
As Applied Blockchain Inc (NASDAQ:APLD) navigates through its current challenges, real-time data from InvestingPro provides a clearer picture of the company's financial health and market position. With a market capitalization of $375.82 million, the company shows a significant revenue growth of 312.24% over the last twelve months as of Q2 2024. Despite this impressive growth, the company's price-to-earnings (P/E) ratio stands at -12.81, reflecting its lack of profitability in the same period.
InvestingPro Tips highlight that analysts are forecasting sales growth in the current year, which aligns with the company's substantial revenue increase. However, concerns are raised as the company is quickly burning through cash and has short term obligations that exceed its liquid assets. These financial pressures are evident as 2 analysts have revised their earnings downwards for the upcoming period, and the stock has experienced a significant decline, falling 58.28% over the last three months.
For investors looking for a deeper dive into Applied Blockchain's metrics and future prospects, there are additional InvestingPro Tips available that can provide a more comprehensive analysis. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription for access to these valuable insights.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.