Digihost Technology Inc. ( DGHI ) misses second-quarter profit and revenue estimates

Digihost Technology Inc. ( DGHI ) reported quarterly earnings of $0.13 per share, beating the Zacks Consensus Estimate of $0.18 per share. This compares with profitability per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents a revenue surprise of -27.78%. A quarter ago, this company was expected to report earnings of $0.16 per share, when it actually generated break-even earnings, delivering a surprise of -100%.

In the past four quarters, the company has failed to beat consensus EPS estimates.

Digihost Technology Inc., which belongs to Zacks’ Technology Services industry, reported revenue of $7.46 million for the quarter ending June 2022, beating the Zacks’ consensus estimate by 58.32%. That compares with a year ago’s revenue of $5.11 million. The company has failed to beat consensus revenue estimates for the past four quarters.

The sustainability of immediate stock price movement based on recently released numbers and future earnings expectations will depend mostly on management’s commentary on the earnings call.

Shares of Digihost Technology Inc. have lost about 68.9% year-to-date compared to the S&P 500’s -10.2% decline.

What’s Next for Digihost Technology Inc.

Although Digihost Technology Inc. has underperformed the market so far this year, the question on investors’ minds is: what’s next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is a company’s earnings outlook. This includes not only current consensus earnings expectations for the coming quarters, but also how those expectations have changed recently.

Empirical research shows a strong relationship between short-term stock movements and trends in earnings estimate revisions. Investors can track such revisions themselves or rely on a tried and tested rating tool like Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings announcement, the forecast revision trend for Digihost Technology Inc. is mixed. While the extent and direction of the rating revisions may change following the company’s just-released earnings report, the current status becomes a Zacks Rank #3 (Hold) for the stock. So the stock is expected to perform in line with the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the forecasts for the next quarters and the current fiscal year change in the coming days. The current EPS consensus estimate is $0.21 on $22.2 million in revenue for the next quarter and $0.73 on $76 million in revenue for the current fiscal year.

Investors should be aware that the outlook for the industry can have a significant impact on stock performance as well. In terms of Zacks Industry Rank, Technology Services is currently in the bottom 45% of the 250-plus Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2-to-1.

Another stock in the same industry, Bit Digital, Inc. ( BTBT ), has yet to report results for the quarter ended June 2022.

This company is expected to post quarterly earnings of $0.01 per share in its upcoming report, representing a year-over-year change of -90.9%. The consensus EPS estimate for the quarter has remained unchanged over the past 30 days.

Bit Digital, Inc.’s revenue is expected to be $14.3 million, down 49.5% from the year-ago quarter.

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