Cipher Mining stock holds Buy rating, $6.75 target from H.C. Wainwright

On Wednesday, H.C. Wainwright maintained a positive outlook on Cipher Mining (NASDAQ:CIFR), reaffirming a Buy rating and a price target of $6.75. Currently trading at $3.04, InvestingPro analysis suggests the stock is undervalued, with analyst targets ranging from $4 to $9. The company, with a market capitalization of $1.13 billion, has shown promising potential despite its high price volatility. The endorsement follows Cipher’s announcement of robust first-quarter results for 2025 on May 6, along with the reiteration of its third-quarter hash rate guidance of 23 EH/s. Additionally, Cipher unveiled a significant step forward in its high-performance computing and artificial intelligence (HPC/AI) initiatives.

Cipher Mining has entered into a joint venture agreement with Fortress to establish HPC/AI data centers at its 300 MW Barber Lake facility. This strategic move is expected to enable Cipher to secure approximately 40% of the future HPC economics without requiring further capital investment to develop the site, although a tenant has not yet been confirmed. According to InvestingPro data, the company maintains a moderate debt level with a debt-to-equity ratio of just 0.03, positioning it well for this expansion. While currently operating at an 18.14% gross profit margin, analysts forecast an 86% revenue growth for FY2025. The company is also progressing ahead of schedule with the 150 MW expansion at Black Pearl, anticipating an additional 2.5 EH/s from rigs currently in inventory to be operational in the second quarter. This would increase the total Bitcoin mining capacity to 16 EH/s, up from the current 13.5 EH/s.

Cipher’s management remains confident in reaching the target of 23 EH/s by the end of the third quarter, based on ongoing discussions with rig manufacturers and the expected delivery schedule, although the new rigs are likely to incur a 10% tariff. The company’s development pipeline of 2.8 GW is also attracting significant interest, with active negotiations underway with potential tenants, primarily for the Barber Lake facility.

The partnership with Fortress is seen as a pivotal development that could expedite Cipher’s efforts to secure an HPC/AI tenant, leveraging Fortress’s extensive experience in data center development and its established network within the hyperscaler community. InvestingPro subscribers can access 14 additional investment tips and a comprehensive analysis of Cipher Mining’s financial health, which currently rates as FAIR with a score of 2.26 out of 5. Despite the positive developments, Cipher Mining’s stock experienced a slight decline of 0.8% in early trading Wednesday, alongside a broader 0.7% drop in the Nasdaq. H.C. Wainwright expressed surprise at the stock’s initial downturn, considering the encouraging news on the HPC/AI front, which has been a focal point for investors. The firm reiterated its Buy rating and price target of $6.75, underscoring its confidence in Cipher Mining’s strategic direction and growth prospects.

In other recent news, Cipher Mining Inc. reported an unexpected earnings beat for Q1 2025, with adjusted earnings per share of $0.02, outperforming the forecasted loss of $0.07 per share. The company’s revenue reached $49 million, which, while a 16% increase from the previous quarter, fell short of the expected $53.34 million. Despite the revenue miss, Cipher Mining demonstrated effective cost management, leading to a GAAP net loss of $39 million. On the development front, the company is advancing its data center capabilities, particularly at its Odessa facility, which has benefited from higher Bitcoin production.

Additionally, Cipher Mining is exploring opportunities in high-performance computing data centers, with plans to expand its Barbara Lake data center to potentially 800 MW by 2029. The company has also signed a term sheet with Fortress Credit Advisors LLC to finance the development of the Barbara Lake data center. This partnership is seen as a strategic move to support the company’s expansion into data center development. Analyst feedback from firms such as Cantor Fitzgerald and Canaccord Genuity reflects a positive outlook on Cipher Mining’s strategic direction and operational improvements. These developments underscore Cipher Mining’s commitment to diversifying its operations and enhancing its infrastructure capabilities.

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