Clear Street sets Core Scientific stock at Buy, $20 target

On Wednesday, Clear Street initiated coverage on Core Scientific Inc . (NASDAQ:CORZ), a company that specializes in high-performance computing (HPC) infrastructure, with a Buy rating and a price target of $20.00. The stock, currently trading at $8.00, has shown remarkable strength with a 137% return over the past year, according to InvestingPro data. The firm’s analysts highlighted the company’s transition from Bitcoin mining toward artificial intelligence compute as a pivotal move that has secured Core Scientific $10 billion in long-term contracted revenue, primarily with CoreWeave (CRVW, NC).

The analysts at Clear Street have pointed out that Core Scientific’s shift in focus positions the company for stable and high-margin growth. The contracted revenue is expected to underpin the company’s financials as it ventures deeper into the HPC space. With a strong current ratio of 6.72 and liquid assets exceeding short-term obligations, the company appears well-positioned for this transition. According to the analysts, the current share price offers an attractive entry point for investors.

In their report, Clear Street analysts emphasized the valuation of Core Scientific’s shares in the context of future earnings before interest, taxes, depreciation, and amortization (EBITDA). They noted that the shares are trading at multiples of 3.6 times their estimated 2026 enterprise value to EBITDA (EV/EBITDA) and 2.7 times the 2027 estimate. Currently, the company’s EBITDA stands at $98.22 million, with an EV/EBITDA multiple of 27.66x. These multiples suggest that the analysts see the stock as undervalued based on their earnings projections.

The analysts’ positive outlook is based on Core Scientific’s strategic realignment towards HPC infrastructure, a move that has already yielded significant contracted revenue with CoreWeave. This partnership is seen as a key driver for the company’s growth trajectory and financial stability in the coming years.

Shares of Core Scientific Inc. are expected to be influenced by this new coverage, as investors and the market respond to Clear Street’s assessment and the company’s strategic developments. The price target of $20.00 set by Clear Street aligns with the broader analyst consensus, with targets ranging from $17 to $24. InvestingPro analysis suggests the stock is currently overvalued, with additional insights available in the comprehensive Pro Research Report, which offers deep-dive analysis of this and 1,400+ other US stocks.

In other recent news, Core Scientific Inc. reported a decrease in its Bitcoin mining productivity for February, with the firm mining an average of 7.7 Bitcoins per day, down from 8.3 in January. This decline in mining rate and revenue, which fell to $20.6 million from $25.5 million in January, was attributed to a slight decrease in the company’s energized hash rate and the shorter month. Cantor Fitzgerald responded to these developments by adjusting its price target for Core Scientific shares to $20.00 from $21.00, while maintaining an Overweight rating. Meanwhile, Core Scientific announced the appointment of KPMG LLP as its new auditor, replacing Marcum LLP, effective immediately. The company acknowledged material weaknesses in its internal control over financial reporting, which were detailed in its recent SEC filing. Analysts from H.C. Wainwright and Compass Point reaffirmed their Buy ratings on Core Scientific, with price targets of $17.00 and $20.00, respectively. The analysts highlighted the company’s strong execution and its association with CoreWeave, which recently secured a significant contract with OpenAI. Core Scientific’s extended contract with CoreWeave is expected to generate over $10 billion in cumulative revenue over 12 years, potentially boosting the company’s market position.

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