Compass Point cuts Core Scientific price target to $20, maintains Buy

Tuesday, Compass Point analyst Chase White revised the price target for Core Scientific Inc . (NASDAQ:CORZ) to $20 from the previous $26, while still recommending the stock as a Buy. White’s reassessment comes in anticipation of Core Scientific’s fourth-quarter 2024 financial results, scheduled for February 26, aiming to address concerns that have recently influenced the company’s market valuation. According to InvestingPro data, analyst targets for the stock currently range from $17 to $25.50, suggesting significant upside potential from current levels.

Core Scientific, a major player in blockchain infrastructure and software solutions with a market capitalization of $3.49 billion, has experienced a decline in its stock price, falling below $10. The stock has seen a sharp 20% decline over the past week, and InvestingPro analysis indicates the stock is currently in oversold territory. Despite this downturn, White suggests that the current low price offers a considerable buying opportunity. He points to CoreWeave’s 500MW contracts, which are currently trading at significant discounts, including 8x EBITDA and 15% capitalization rates.

The analyst also addressed the sensationalized news that has been affecting investor perceptions, likening it to similar situations with other companies in the industry. White believes that much of this news is not new and maintains a positive outlook on Core Scientific’s positioning and future prospects.

Furthermore, White has adjusted the calendar year 2025 estimates for Core Scientific, now projecting $590 million in revenue and $192 million in adjusted EBITDA, building upon the company’s current trailing twelve-month revenue of $557.68 million. This includes an $85 million capex credit connected to high-performance computing (HPC) initiatives. The lowered price target of $20 per share reflects a recalibrated valuation and a reduced multiple to account for increased risks. Nevertheless, White anticipates a strong potential for upside, predicting a re-rating over the course of the year driven by the company’s execution and revenue generation from signed contracts and forthcoming lease announcements. For deeper insights into Core Scientific’s valuation and growth prospects, access the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Core Scientific Inc. announced plans to conduct a private offering of $500 million in convertible senior notes, which are set to mature in 2031. This financial strategy is aimed at securing additional funding through institutional channels and offers investors the potential to convert debt into equity at a later date. Meanwhile, Core Scientific has secured $8.7 billion in high-margin revenue through contracts, according to Craig-Hallum, which initiated coverage with a Buy rating and a price target of $24.00. Compass Point also raised its price target for Core Scientific to $26.00, maintaining a Buy rating, citing the company’s ability to secure high-performance computing contracts and anticipated customer diversification.

Jones Trading, however, maintained a Hold rating on Core Scientific, adjusting their Q4:24 revenue and EBITDA projections downward due to lower expected earnings from digital asset self-mining operations. Despite these adjustments, Jones Trading’s estimates for 2025 and 2026 remain mostly unchanged, reflecting a cautious outlook on certain business segments. The firm’s analysis points to ongoing concerns about Core Scientific’s AI neocloud model and customer risk associated with CoreWeave. Core Scientific’s recent developments, including lease amendments at its Denton site to increase power access, signal the company’s efforts to expand capacity and secure its position in the AI and cloud computing markets.

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