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On Thursday, Citizens JMP analysts initiated coverage on Terawulf Inc. (NASDAQ:WULF) with a Market Outperform rating and a price target of $7.00. The stock, which has shown significant volatility with a beta of 4.15 and an impressive 81% return over the past year according to InvestingPro data, currently trades at $3.91. The new rating reflects the firm’s optimistic view on the company’s strategic shift from primarily being a bitcoin miner to becoming a key player in providing infrastructure for high-performance computing, specifically in the AI training space.
Terawulf has been recognized for its expertise in power management and is now leveraging this to offer space and power in low-cost power locations to the high-performance computing industry. This move is seen as a significant step for the company in diversifying its business model and offering more stable revenue streams beyond the volatile cryptocurrency market. InvestingPro data shows the company’s revenue grew by 32% in the last twelve months, though it’s currently burning through cash with negative free cash flow.
The analysts highlighted that Terawulf’s substantial power capacity, with 750 megawatts at Lake Mariner and 400 megawatts at Cayuga, is a valuable asset. These facilities are expected to generate considerable value for the company. According to the analysts, when the costs are netted out, the capacity could yield an incremental value of approximately $34.00 per share above the current share price.
The current share price, as suggested by the analysts, appears to only reflect the value of Terawulf’s bitcoin mining operations. With the added potential from its high-performance computing infrastructure services, the company’s stock seems to have room to grow, hence the Market Outperform rating and the $7.00 price target.
The analysts’ commentary underscores the potential for Terawulf to monetize its existing infrastructure effectively. Their analysis suggests that the company is well-positioned to capitalize on the growing demand for high-performance computing power, which is increasingly sought after for AI training and other intensive computational tasks. While the company maintains a healthy current ratio of 1.9, InvestingPro analysis reveals 15+ additional key insights about WULF’s financial health and growth prospects, available exclusively to subscribers through the comprehensive Pro Research Report.
In other recent news, Terawulf Inc. reported its first-quarter 2025 earnings, revealing financial challenges as both earnings and revenue fell short of analyst expectations. The company posted an earnings per share (EPS) of -$0.16, significantly missing the forecasted -$0.04, while revenue came in at $34.4 million, below the anticipated $46.07 million. Despite these setbacks, Terawulf is focusing on strategic growth by expanding its power capacity and developing high-performance computing (HPC) infrastructure. Compass Point has raised its price target for Terawulf to $6.50, maintaining a Buy rating on the company’s shares. The firm anticipates new HPC facilities to come online in 2025, with a focus on scaling up to 60MW and maintaining 75% EBITDA margins. Analysts from Compass Point view the closing of Project Financing as a potential catalyst for Terawulf, with the expectation of securing 70% loan-to-cost financing at 8% interest rates. Additionally, Terawulf has increased its share buy-back program, reflecting confidence in its strategic initiatives. These developments indicate Terawulf’s ongoing efforts to navigate financial challenges while positioning itself for future growth.
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