Street Calls of the Week
Investing.com - Needham raised its price target on CleanSpark Inc. (NASDAQ:CLSK) to $23.00 from $21.00 on Friday, while maintaining a Buy rating on the bitcoin mining company. The stock, currently trading near its 52-week high with a market cap of $5.65 billion, has delivered an impressive 182% return over the past six months. According to InvestingPro analysis, the company appears overvalued at current levels, though it maintains strong financial health with a current ratio of 4.37.
The price target increase follows Needham’s tour of CleanSpark’s bitcoin mining facilities in Jackson, Tennessee (60MW) and Sandersville, Georgia (241MW) on Thursday with management.
Needham believes CleanSpark is "serious about establishing an HPC [high-performance computing] pipeline" and expects the company to make near-term data center hires to begin the process.
The firm noted that management is taking a conservative approach to HPC, likely targeting 50MW (critical load) in initial phases, which can be "easily funded given the robust BS (~$1.5Bn in bitcoin)." While CleanSpark has HPC-suitable sites in its current 1.2GW contracted power portfolio, management appears most focused on a greenfield project for its HPC initiative.
The price target increase specifically reflects the HPC opportunity, which Needham had not previously considered in its valuation of CleanSpark.
In other recent news, CleanSpark Inc. reported a decrease in Bitcoin mining revenue for September, generating approximately $71.4 million, down from $75.7 million in August. Despite this, the company announced an increase in its Bitcoin holdings, surpassing 13,000 BTC, and reported improvements in production efficiency and fleet efficiency year-over-year. CleanSpark also secured a significant $100 million Bitcoin-backed credit facility with Two Prime, bringing its total collateralized lending facilities to $400 million. This financing is aimed at supporting the expansion of its Bitcoin mining hashrate and investments in high-performance computing capabilities.
Cantor Fitzgerald raised its price target for CleanSpark from $23 to $24 while maintaining an Overweight rating, attributing this to higher Bitcoin prices. Conversely, JPMorgan downgraded CleanSpark from Overweight to Neutral, lowering its price target to $14 due to valuation concerns. The company has maintained a stable operational hashrate of 50 EH/s, positioning it among the largest publicly listed Bitcoin miners. These developments highlight CleanSpark’s strategic financial maneuvers and operational achievements in the Bitcoin mining sector.
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