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CleanSpark: Appealing Valuation and Growth Outlook
Stock Analysis & Ideas

CleanSpark: Appealing Valuation and Growth Outlook

CleanSpark (CLSK) is a bitcoin mining and sustainable energy technology company that has a mission to solve modern energy challenges. The company was incorporated in 1987 and has its headquarters in Henderson, Nevada.

I am bullish on CleanSpark as its strong growth outlook, support from Wall Street analysts, and high upside potential indicate that it could be worth considering.

Strengths

CleanSpark consists of two segments: Bitcoin Mining and Energy. The Energy segment offers engineering, design, custom hardware, software, solar, and energy storage solutions for microgrids and distributed energy systems to commercial, residential, and military customers.

In addition, the corporation offers technology-based consultancy services, data center services, and a range of cloud services.

The corporation has made significant acquisitions in the real estate and energy industries, including a data center in Norcross, GA, and a data center in College Park, GA.

In addition, it experienced an exponential hashrate increase from zero to 1.3 EH/s in less than a year in its Digital Currency segment.

Recent Results

CleanSpark reported revenue of $49.4 million for Fiscal Year 2021, which ended September 30, up almost 400% from the $10 million in the previous year’s period. Net loss was $21.8 million compared to a loss of $23.3 million in Fiscal Year 2020. 

Adjusted EBITDA was $9 million or $0.31 per share. This is compared to a loss of $1.07 per share for the previous year.

Fourth-quarter revenue in 2021 was $27.1 million, an increase of almost 1300% from the $1.95 million generated in the fourth quarter of 2020.

As of September 30, 2021, the total current assets of CleanSpark were $57.7 million, total liabilities were $11.8 million, and total stockholders’ equity was $305.7 million.

Valuation Metrics

CLSK stock looks attractive here as its forward enterprise-value-to-EBITDA ratio is only 6.3x compared to its historical average of 8.2x. In addition, its forward price-to-normalized-earnings ratio looks quite reasonable at 6.2x.

Moreover, the company expects Fiscal Year 2022 revenue to grow by a whopping 295%, followed by 17.2% revenue growth in Fiscal Year 2023. EBITDA will see even more dramatic growth, with expectations that it will rise by 3,021.5% in Fiscal Year 2022 and 17% in Fiscal Year 2023. 

Wall Street’s Take

Turning to Wall Street, CleanSpark earns a Moderate Buy consensus rating, based on one Buy assigned in the past three months. Additionally, the CleanSpark price target of $16.00 implies 34.3% upside potential.

Summary and Conclusion

CLSK is a rapidly growing company that should benefit from solid growth trends and innovation in its Bitcoin Mining and Energy segments. On top of that, the valuation looks quite appealing right now especially given the robust growth outlook for the next couple of fiscal years.

Given that Wall Street analysts are bullish on the stock and the consensus price target indicates substantial upside for the stock in the coming year, it looks like it might be worth considering.

Disclosure: At the time of publication, Samuel Smith did not have a position in any of the securities mentioned in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates  Read full disclaimer >

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