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Iris Energy (IREN)
NASDAQ:IREN
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Iris Energy
(NASDAQ:IREN)
49Neutral
Positive Factors
Earnings
Total revenue more than doubled and cost per coin declined materially, which is impressive.
Expansion Plans
Management's Sweetwater update was material, with the acquisition of land for Sweetwater Two and potential for a 600MW addition to a fiber-connected campus across both sites.
Growth Prospects
The company's revenue estimates for FY2025 and FY2026 have been adjusted upwards, reflecting improved utilization and updated forecasts for BTC and global hash rates.
Negative Factors
Cloud Services
Cloud Services revenue was down modestly, below company guidance.
Equity Concerns
Concerns exist about having a contract in place before equity dilution around the newly announced 50MW HPC capacity.
Partnership Issues
There are near-term concerns with Sweetwater after IREN formally ended the involvement with MS.
Iris Energy (IREN) vs. S&P 500 (SPY)
Market Cap
$1.68B
Dividend YieldN/A
Average Volume (3M)14.09M
Price to Earnings (P/E)―
Beta (1Y)2.18
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees144
SectorFinancial
Sector Strength87
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)0.09
Shares Outstanding224,458,900
10 Day Avg. Volume12,747,412
30 Day Avg. Volume14,090,480
Financial Highlights & Ratios
PEG Ratio-0.74
Price to Book (P/B)1.07
Price to Sales (P/S)0.00
P/FCF Ratio-1.61
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$17.55Price Target Upside133.69% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Iris Energy Business Overview & Revenue Model
Company DescriptionIris Energy Limited owns and operates bitcoin mining data centers. It also provides high performance computing solutions, including Al cloud services. The company was incorporated in 2018 and is headquartered in Sydney, Australia.
How the Company Makes MoneyIris Energy makes money primarily through the mining of Bitcoin, which involves using specialized hardware to solve complex mathematical problems that validate transactions on the Bitcoin network. In return for this computational work, the company earns Bitcoin as a reward, which can then be sold on the open market for revenue. Key revenue streams include the sale of mined Bitcoin and potentially offering hosting services for third-party miners. The company's commitment to using renewable energy may also attract partnerships with environmentally conscious investors and organizations seeking to support sustainable technology initiatives.
Iris Energy Financial Statement Overview
Summary
Iris Energy shows strong revenue growth and a solid equity position, but struggles with profitability and cash flow generation. The gross margins are high, but net margins suffer due to significant operating costs. A strong balance sheet with low leverage supports financial stability, yet improving free cash flow and net income remains critical for sustainable growth.Income Statement
Iris Energy shows significant revenue growth from $2.17M in 2020 to $282.69M in TTM (Trailing-Twelve-Months) 2024, indicating strong top-line expansion. However, the company faces challenges with profitability, as evidenced by a negative EBIT and net income margins. The gross profit margin remains robust at 77.07% TTM, but high operating expenses are impacting net profitability.45
Neutral
Balance Sheet
The company maintains a solid equity base, with a high equity ratio of 69.45% in TTM 2024, indicating financial stability. The debt-to-equity ratio of 0.25 suggests a conservative use of leverage. However, the company needs to address its net losses to improve return on equity, which currently is negative due to consistent net losses.60
Neutral
Cash Flow
Iris Energy's free cash flow remains negative despite a positive operating cash flow of $31.65M TTM, due to substantial capital expenditures. The operating cash flow to net income ratio is positive, indicating cash from operations is better than accounting profits. However, the free cash flow to net income ratio remains negative, necessitating better capital management.50
Neutral
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 282.69M | 188.76M | 75.51M | 59.04M | 7.84M | 2.17M | Gross Profit |
| 217.85M | 166.56M | 57.61M | 51.59M | 5.18M | 868.00K | EBIT |
| -38.84M | -26.33M | -153.85M | 462.00K | ― | -1.69M | EBITDA |
| 68.90M | 25.40M | -122.26M | -377.12M | -43.38M | -1.25M | Net Income Common Stockholders |
| -51.26M | -28.95M | -171.87M | -419.77M | ― | -2.13M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 455.57M | 411.13M | 68.89M | 109.97M | 39.08M | 1.96M | Total Assets |
| 1.85B | 1.15B | 332.07M | 570.46M | 134.88M | 11.57M | Total Debt |
| 319.91M | 1.66M | 1.45M | 108.21M | 84.03M | 1.96M | Net Debt |
| -107.36M | -402.95M | -67.45M | -1.76M | 44.95M | 5.00K | Total Liabilities |
| 565.81M | 55.68M | 26.71M | 133.10M | 184.36M | 2.75M | Stockholders Equity |
| 1.29B | 1.10B | 305.36M | 437.36M | ― | 8.82M |
| Cash Flow | Free Cash Flow | ||||
| -905.97M | -427.19M | -110.02M | -272.69M | ― | -5.32M | Operating Cash Flow |
| -26.66M | 52.72M | 6.04M | 21.56M | 1.64M | -987.00K | Investing Cash Flow |
| -992.32M | -498.47M | -71.47M | -318.12M | ― | -4.49M | Financing Cash Flow |
| 1.25B | 782.13M | 28.24M | 372.04M | 116.57M | 7.31M |
Iris Energy Technical Analysis
Positive
7.51
Price Trends
6.57
Positive
8.85
Negative
9.11
Negative
Market Momentum
0.22
Negative
69.62
Neutral
89.81
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IREN, the sentiment is Positive. The current price of 7.51 is above the 20-day moving average (MA) of 6.38, above the 50-day MA of 6.57, and below the 200-day MA of 9.11, indicating a neutral trend. The MACD of 0.22 indicates Negative momentum. The RSI at 69.62 is Neutral, neither overbought nor oversold. The STOCH value of 89.81 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IREN.
Iris Energy Risk Analysis
Iris Energy disclosed 99 risk factors in its most recent earnings report. Iris Energy reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Iris Energy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $438.07M | 8.87 | 9.19% | ― | 140.56% | ― | |
65 Neutral | $610.02M | 11.30 | 56.54% | ― | ― | 96.50% | |
64 Neutral | $12.73B | 9.82 | 7.91% | 17015.08% | 12.18% | -5.69% | |
49 Neutral | $1.68B | ― | -6.15% | ― | ― | ― | |
47 Neutral | $1.15B | ― | -56.12% | ― | 31.85% | -34.27% | |
47 Neutral | $1.17B | ― | -18.49% | ― | -0.65% | -808.88% | |
37 Underperform | $23.86M | ― | 242.25% | ― | ― | ― |
* Financial Sector Average
Performance Comparison
IREN
Iris Energy
8.12
3.25
66.74%
WULF
TeraWulf Inc
3.83
1.79
87.75%
BTBT
Bit Digital
2.24
-0.02
-0.88%
CIFR
Cipher Mining
3.43
-0.28
-7.55%
ARBK
Argo Blockchain
0.38
-0.97
-71.85%
FUFU
BitFuFu
4.00
1.13
39.37%
Iris Energy Earnings Call Summary
Earnings Call Date:Feb 12, 2025
(Q2-2025)
| % Change Since: -42.28%|
Next Earnings Date:May 14, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance with record profit and significant growth initiatives in Bitcoin mining and AI data centers. While there are challenges in securing grid connections and deferred investor payouts, the company's strategic expansions seem promising.Q2-2025 Updates
Positive Updates
Record NPAT and Bitcoin Mining Revenue
The company reported a net profit after tax (NPAT) of $18.9 million and Bitcoin mining revenue of $113.5 million for Q2 FY '25.
Significant Hashrate Expansion
Achieved 31 exahash of energized capacity with plans to ramp up to 50 exahash by mid-year and 52 exahash later in the year.
Launch of Horizon 1 AI Data Center
Announcement of a new 75-megawatt liquid cooled AI data center at Childress, designed for high-density racks, expected to be completed in the second half of this year.
Sweetwater 2 Development
Development of a new 600-megawatt site in West Texas, which could create a 2-gigawatt data center hub by 2028.
Strong Balance Sheet and Funding Options
Closed an oversubscribed convertible note at the end of 2024 and established a $1 billion ATM facility to fund growth initiatives.
Negative Updates
Deferred Investor Distributions
Decision to defer potential investor distributions to accelerate investment into strategic initiatives.
Challenges in Securing Grid Connection
The process of securing grid connection agreements is becoming increasingly difficult and time-consuming.
Risks in Sweetwater 2 Project
The Sweetwater 2 project is still hypothetical and there are risks associated with finalizing the grid connection agreement.
Company Guidance
In the second quarter of fiscal year 2025, IREN reported a record net profit after tax (NPAT) of $18.9 million, driven by a significant increase in Bitcoin mining revenue to $113.5 million and operating cash flows of $53.7 million. The company achieved an average operating hashrate of 22.6 exahash, mining 1,347 Bitcoins at an average realized price of $84.3k. IREN also reported adjusted EBITDA of $62.6 million, reflecting a $60 million increase. The company announced Horizon 1, a 75-megawatt liquid-cooled AI data center to be completed by the second half of the year. Additionally, they are developing Sweetwater 2, a 600-megawatt site to create a 2-gigawatt data center hub in West Texas, with a target energization date of around 2028. IREN closed an oversubscribed convertible note at the end of 2024 and established a $1 billion ATM facility to support growth initiatives.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.