Analysts Are Upgrading DMG Blockchain Solutions Inc. (CVE:DMGI) After Its Latest Results

It’s been a good week for DMG Blockchain Solutions Inc. (CVE:DMGI) shareholders, because the company has just released its latest quarterly results, and the shares gained 5.2% to CA$0.51. It was a negative result overall, with revenues coming in 10% less than what the analyst expected, at CA$6.4m. Following the result, the analyst has updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the lone analyst covering DMG Blockchain Solutions provided consensus estimates of CA$32.5m revenue in 2027, which would reflect a chunky 11% decline over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 68% to CA$0.02. Yet prior to the latest earnings, the analyst had been forecasting revenues of CA$27.3m and losses of CA$0.38 per share in 2027. So there’s been quite a change-up of views after the recent consensus updates, with the analyst making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

See our latest analysis for DMG Blockchain Solutions

It will come as no surprise to learn thatthe analyst has increased their price target for DMG Blockchain Solutions 38% to CA$0.55on the back of these upgrades.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 8.5% annualised decline to the end of 2027. That is a notable change from historical growth of 13% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 16% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining – DMG Blockchain Solutions is expected to lag the wider industry.

The Bottom Line

The most obvious conclusion is that the analyst made no changes to their forecasts for a loss next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.

However, before you get too enthused, we’ve discovered 4 warning signs for DMG Blockchain Solutions (2 are significant!) that you should be aware of.

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Have feedback on this article? Concerned about the content?Get in touchwith 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.

MI
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About TSXV:DMGI

DMG Blockchain Solutions

Operates as a blockchain and data center technology company in North America.

Slight risk with mediocre balance sheet.

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