Riot Platforms (RIOT) currently holds an Average Brokerage Recommendation (ABR) of 1.24, approximating a Strong Buy based on 14 Strong Buys and 2 Buys from 17 firms. However, the article advises caution with ABRs due to their inherent optimistic bias, advocating for the Zacks Rank, a quantitative model driven by earnings estimate revisions, as a more reliable indicator. Despite the favorable ABR, RIOT is assigned a Zacks Rank #3 (Hold), reflecting an unchanged consensus earnings estimate of -$0.67 for the current year, suggesting a prudent approach to the stock.
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ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. If you wish to go to ZacksTrade, click OK. If you do not, click Cancel. Riot Platforms, Inc. (RIOT) Is Considered a Good Investment by Brokers: Is That True? Read MoreHide Full Article The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though? Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Riot Platforms, Inc. (RIOT - Free Report) . Riot Platforms, Inc. currently has an average brokerage recommendation (ABR) of 1.24, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 17 brokerage firms. An ABR of 1.24 approximates between Strong Buy and Buy. Of the 17 recommendations that derive the current ABR, 14 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 82.4% and 11.8% of all recommendations. The ABR suggests buying Riot Platforms, Inc., but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation. Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation. This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements. Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision. ABR Should Not Be Confused With Zacks Rank Although both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether. The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5. It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them. In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research. In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks. There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices. Should You Invest in RIOT? In terms of earnings estimate revisions for Riot Platforms, Inc., the Zacks Consensus Estimate for the current year has remained unchanged over the past month at -$0.67. Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term. It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Riot Platforms, Inc. Zacks' Research Chief Names "Stock Most Likely to Double" Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest. This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%. Image: Bigstock Riot Platforms, Inc. (RIOT) Is Considered a Good Investment by Brokers: Is That True? The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though? Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Riot Platforms, Inc. (RIOT - Free Report) . Riot Platforms, Inc. currently has an average brokerage recommendation (ABR) of 1.24, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 17 brokerage firms. An ABR of 1.24 approximates between Strong Buy and Buy. Of the 17 recommendations that derive the current ABR, 14 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 82.4% and 11.8% of all recommendations. Brokerage Recommendation Trends for RIOT Check price target & stock forecast for Riot Platforms, Inc. here>>> The ABR suggests buying Riot Platforms, Inc., but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation. Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation. This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements. Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision. ABR Should Not Be Confused With Zacks Rank Although both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5. It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them. In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research. In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks. There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices. Should You Invest in RIOT? In terms of earnings estimate revisions for Riot Platforms, Inc., the Zacks Consensus Estimate for the current year has remained unchanged over the past month at -$0.67.Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank 3 (Hold) for Riot Platforms, Inc. You can see the complete list of today's Zacks Rank 1 (Strong Buy) stocks here >>>> It may therefore be prudent to be a little cautious with the Buy-equivalent ABR for Riot Platforms, Inc. Zacks' Research Chief Names "Stock Most Likely to Double" Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest. This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%. Free: See Our Top Stock And 4 Runners Up A significant divergence in signals exists for Riot Platforms, Inc. (RIOT), creating a complex investment picture. On one hand, sell-side analyst sentiment is exceptionally bullish, reflected by an Average Brokerage Recommendation (ABR) of 1.24 on a 1-to-5 scale. This rating is derived from 17 brokerage firms, with 14 (82.4%) issuing a 'Strong Buy' and two (11.8%) a 'Buy' recommendation. However, this positive consensus is directly challenged by the company's underlying earnings estimate trends. The Zacks Consensus Estimate for the current year has remained stagnant at -$0.67 over the past month, indicating a lack of positive revisions from analysts. This stasis in earnings expectations has resulted in a neutral Zacks Rank of 3 (Hold), suggesting that the stock may only perform in line with the broader market in the near term and casting doubt on the conviction of the bullish sell-side ratings.
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