As Bitcoin continues its ascent to near all-time highs, mining companies have experienced remarkable growth in recent months. Cleanspark (NASDAQ: CLSK), a U.S.-based Bitcoin miner, has particularly captured investor attention with its stock surging 103% year-to-date and a staggering 792% over the last 12 months. However, the question arises: Is Cleanspark currently fairly valued or overvalued based on its current multiples?
In fiscal Q1 of 2024 (ending in December), Cleanspark demonstrated robust financial performance. The company reported revenue of $73.8 million, marking a substantial 165% increase year over year. Net income stood at $25.9 million, or $0.14 per share, a significant improvement compared to the loss incurred in the year-ago period. Additionally, adjusted EBITDA reached $69.1 million, compared to a loss in the same period of the previous fiscal year.
The surge in Bitcoin prices contributed to Cleanspark surpassing revenue and earnings consensus estimates by a wide margin in the December quarter. Notably, the company achieved sales of $168 million in fiscal 2023, indicating significant progress as it covered nearly half the distance to reach its total revenue from the previous year within a single quarter.
Cleanspark aims to achieve a mining capacity of 20 exahashes per second in the first half of the year. A higher hash rate signifies increased computational power, enabling faster problem-solving and enhanced rewards while mining Bitcoin. Although higher hash rates can lead to improved profit margins for miners, they also entail higher energy consumption, posing a profitability challenge.
Cleanspark recently completed the acquisition of three Bitcoin mining data centers, elevating its operating capacity to over 15 exahashes per second (EH/s) and representing a 60% growth in hash rate in 2024, surpassing global hash rate growth. Additionally, the company mined 650 BTC in February, with its digital asset treasury now valued at $260 million. Cleanspark’s investments in hash rate improvement and operational efficiencies position it favorably for the halving event and the anticipated positive impact on Bitcoin prices.
Analysts project Cleanspark to achieve earnings of $0.75 per share by the end of fiscal 2024, compared to a loss in the previous year. Earnings are forecasted to further expand to $1.37 per share in 2025. Revenue expectations are equally bullish, with forecasts doubling to $432 million in 2024 and surging to $826 million in 2025.
Out of the six analysts covering CLSK stock, five recommend a “strong buy” rating, while one suggests a “hold.” The mean target price for CLSK is $18.87, slightly lower than current levels. However, the stock’s high target price of $27 indicates a potential upside of over 19% from current levels, signaling confidence in Cleanspark’s prospects.