Cantor Fitzgerald has adjusted its price target on CleanSpark Inc. (NASDAQ: NASDAQ:CLSK) to $24.00 from the previous $28.00 while maintaining an Overweight rating.
The adjustment comes after CleanSpark's third-quarter financial results for 2024, which revealed revenues slightly above estimates and adjusted EBITDA below expectations, largely due to increased power costs. CleanSpark's average power cost for the quarter was reported at $0.048 per kWh.
The company successfully mined Bitcoin at an average price of approximately $66,000 during the quarter, with an all-in cost of about $44,000 per Bitcoin. CleanSpark has been recognized for its operational efficiency, boasting a 98% uptime and a high rate of Bitcoin mined per exahash per second (EH/s) of hash rate, achieving 23.3 in July.
CleanSpark's growth trajectory has been notable, with the firm doubling its hash rate since January and increasing it by 10% since the end of June. Plans are in place to further expand the hash rate by roughly 45% in the coming months, aiming to reach 32 EH/s by the end of December.
The growth is expected to stem from both organic expansion, such as new power agreements in Wyoming, and inorganic growth through acquisitions in Tennessee (GRIID) and Georgia (60 MW of operational Bitcoin mining data centers).
The company is also investing in upgrading its equipment to newer, more efficient mining machines to enhance its operational capacity. While the broader Bitcoin mining sector has been exploring alternative uses for their computational power, such as artificial intelligence and high-performance computing (AI/HPC), CleanSpark has confirmed its commitment to focusing solely on Bitcoin mining.
CleanSpark mined 494 bitcoins in July and expanded its operations into Wyoming and Tennessee. CleanSpark's Q2 revenue for fiscal year 2024 reached a record-breaking $111.8 million, a 163% increase from the previous year, with an adjusted EBITDA of $181.8 million. The company also reported a net income of $126.7 million for the recent quarter, a substantial turnaround from the net loss of $18.5 million from the previous year.
In addition, CleanSpark announced the appointment of BDO USA, P.C. as its new independent registered public accounting firm, replacing MaloneBailey, LLP. Cantor Fitzgerald has given CleanSpark an Overweight rating, highlighting the company's efficient mining fleet and strong liquidity position. The firm anticipates that once CleanSpark has fully deployed its mining capacity, the average fleet efficiency will improve to below 20 J/TH.
InvestingPro Insights
Following Cantor Fitzgerald's recent price target adjustment on CleanSpark Inc. (NASDAQ:CLSK), InvestingPro data and tips provide additional context for investors considering the stock. CleanSpark's market capitalization stands at approximately $2.7 billion, reflecting its substantial presence in the Bitcoin mining industry. Despite a challenging price environment for Bitcoin, analysts remain optimistic about CleanSpark's potential, expecting net income growth this year. This is supported by the company's strong cash position, which exceeds its debt, providing financial flexibility.
Furthermore, CleanSpark's revenue has shown impressive growth over the last twelve months, with an increase of 140.89%. This growth momentum is anticipated to continue, as analysts predict sales growth in the current year. However, it's important to note that the company's P/E ratio is negative at -14.02, indicating that it has not been profitable over the past twelve months. Nevertheless, the company's liquid assets surpass its short-term obligations, which is a positive sign for its financial health. Investors should also be aware that CleanSpark's stock price has experienced significant volatility, with a 75.77% return over the last year, yet has seen a notable decline over the past three months.
For those interested in a deeper analysis, there are 14 additional InvestingPro Tips available for CleanSpark on InvestingPro, offering insights that could help investors make more informed decisions. The company's commitment to Bitcoin mining efficiency and expansion, coupled with a strong revenue growth trajectory, positions it as a noteworthy player in the sector.
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