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On Tuesday, Jones Trading reiterated its Hold rating on shares of Core Scientific Inc. (NASDAQ: CORZ), following an update to the company’s financial model. The company has shown strong momentum recently, with a 9% return over the past week and impressive revenue growth of 15.8% in the last twelve months, according to InvestingPro data. Analysts at Jones Trading adjusted their forecast to account for Core Scientific’s December production outcomes and the current hashprice. As a result of the updated model, they have slightly reduced their Q4:24 revenue and EBITDA projections due to lower expected earnings from the company’s digital asset self-mining operations.
Despite the downward adjustment for the fourth quarter of 2024, Jones Trading’s estimates for 2025 and 2026 remain mostly unchanged. Core Scientific’s stock is currently trading at multiples of 42.0x and 16.7x enterprise value to EBITDA for the years 2025 and 2026, respectively, based on the firm’s base case hashprice estimates of $0.055 per terahash (TH). InvestingPro analysis indicates the stock is currently trading above its Fair Value, with a current EV/EBITDA multiple of 24x. The company maintains strong liquidity with a current ratio of 3.6x, indicating solid financial health.
The analysts expressed ongoing concerns about certain aspects of Core Scientific’s business model. They highlighted uncertainties surrounding the company’s AI neocloud model and customer risk associated with CoreWeave, particularly in light of recent developments involving Deepseek. This cautionary stance is reflected in their decision to maintain a Hold rating on Core Scientific shares.
Core Scientific is a prominent player in the blockchain infrastructure and digital asset mining industry. Its business includes self-mining operations, where the company mines digital assets for its own account, and hosting services for third-party miners. The company’s performance is closely tied to the fluctuating prices of digital assets and the underlying hashprice, which measures the revenue generated per unit of computational power used in mining.
Jones Trading’s analysis suggests that while there is potential in Core Scientific’s operations, the uncertainties in certain business segments warrant a cautious approach. Investors holding Core Scientific stock may wish to consider the insights provided by Jones Trading as they assess the company’s future prospects and market position. For a deeper understanding of Core Scientific’s valuation and growth potential, investors can access comprehensive analysis and 12 additional ProTips through InvestingPro’s detailed research report, which provides expert insights and key metrics for informed decision-making.
In other recent news, Core Scientific has been the subject of several significant developments. Craig-Hallum initiated coverage on the company with a Buy rating and a price target of $24.00, highlighting the company’s recent CoreWeave deal and its potential for growth. Core Scientific has also announced its plans to conduct a private offering of $500 million in convertible senior notes, aiming to secure additional funding through institutional channels.
Compass Point has raised the price target for Core Scientific to $26.00, maintaining a Buy rating on the stock. The firm expects Core Scientific to diversify its customer base by the end of 2024, potentially as a result of the signing of its Auburn, AL site. Core Scientific has also initiated construction on a new 100-megawatt data center in Muskogee, Oklahoma, part of a larger agreement with CoreWeave involving a total of 500 megawatts of IT load contracted for high-performance computing hosting operations.
These recent developments indicate a period of strategic growth and diversification for Core Scientific. Analysts from Craig-Hallum, Compass Point, and other firms have expressed confidence in the company’s ability to capitalize on its opportunities and maintain its position as a key player in the AI/HPC industry.
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