Domo signs strategic collaboration agreement with AWS for AI solutions
On Thursday, Cantor Fitzgerald analyst Brett Knoblauch adjusted the price target for Core Scientific Inc. (NASDAQ: CORZ) shares, bringing it down to $20.00 from the previous $21.00, while retaining an Overweight rating on the stock. The revision follows Core Scientific’s reported decrease in Bitcoin mining productivity and revenue for February. According to InvestingPro data, the stock has experienced significant volatility, currently trading at $9.60, down over 31% year-to-date despite maintaining a strong current ratio of 6.72.
Core Scientific’s mining operations yielded 215 Bitcoins for the month, which translates to an average of 7.7 Bitcoins per day. This marks a reduction from the 256 Bitcoins, or 8.3 per day, that were mined in January. Additionally, the company’s energized hash rate saw a slight decrease, ending February at 18.4 EH/s, down from 18.5 EH/s at the end of January.
The firm also noted a decline in Bitcoin mining revenue for Core Scientific. Utilizing an average Bitcoin price of $95,851, the estimated revenue for February was $20.6 million, a drop from the $25.5 million recorded in January. The decrease in revenue is primarily attributed to the dip in Core Scientific’s hash rate during a period when the average network hash rate grew by approximately 3.75%, and the shorter month of February compared to January.
Cantor Fitzgerald remains positive about Core Scientific’s future despite the recent downturn. The analyst believes that the market currently underestimates the potential value of Core Scientific’s ability to sign additional tenants. Diversifying its portfolio is seen as a key strategy for Core Scientific to have its shares trade at a cap rate more akin to that of data centers. The firm expresses confidence in Core Scientific’s capacity to achieve this diversification over the coming years, citing the attractive risk/reward profile at current market levels. Trading at an EV/EBITDA multiple of 32.4x, InvestingPro analysis indicates the stock is currently overvalued, though analysts project profitability this year. Get the complete financial picture with InvestingPro’s comprehensive research report, available along with 10+ additional ProTips for Core Scientific.
In other recent news, Core Scientific reported a challenging fourth quarter of 2024, marked by a 33% decrease in revenue to $94.9 million and a net loss widening to $265 million from the previous year’s $195.7 million. Despite these setbacks, the company successfully reduced its debt by $270 million through Chapter 11 restructuring and ended the year with a strong cash position of over $830 million. Additionally, Core Scientific appointed Jim Nygaard as the new Chief Financial Officer, succeeding Denise Sterling, who played a crucial role in the company’s restructuring efforts. Nygaard’s extensive experience in mergers and acquisitions is expected to support the company’s growth strategy, which includes expanding its data center operations and converting facilities to support artificial intelligence workloads. The company also announced plans to significantly increase its capacity, aiming to add 400 megawatts of new capacity over the next three years. Furthermore, Core Scientific secured a significant high-performance computing (HPC) hosting contract with CoreWeave, which could generate substantial revenue over the contract term. As part of its growth strategy, the company is focusing on diversifying its customer base and enhancing its infrastructure capacity.
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