Chip stocks fall with Nvidia after data center rev disappointment
Cipher Mining (NASDAQ:CIFR) Technologies Inc. (NASDAQ: CIFR) has maintained its Overweight rating and a price target of $9.00, as confirmed by financial firm Cantor Fitzgerald.
The company reported mining 151 Bitcoin in August, marking a month-over-month decrease from the 169 Bitcoin mined in July.
The decline in production was attributed mainly to participation in demand-response programs and a rise in network difficulty over the month.
The mining firm's operating hash rate at the end of August was recorded at 9.1 exahashes per second (EH/s), up from 8.7 EH/s in July. This increase is largely due to the ongoing deployment of new S21 and S21 Pro Bitmain mining rigs.
Cipher Mining has set ambitious targets, aiming for 13.5 EH/s of hash rate capacity and 18.5 joules per terahash (J/TH) of fleet efficiency, up from the current 9.1 EH/s and 27.8 J/TH reported in their second-quarter release.
In addition to its mining advancements, Cipher Mining has been proactive in securing power resources. The company recently acquired a 300-megawatt (MW) data center site in West Texas, signed a term sheet for three sites totaling 1.5 gigawatts (GW) in North America, and announced the acquisition of a new 70 MW site in Reveille, Texas, which has the potential to expand to 200 MW.
These strategic moves have resulted in Cipher Mining accumulating a power pipeline exceeding 2.6 GW, ranking it among the largest of publicly traded miners in terms of power capacity.
Following the market's close on Wednesday, Cipher Mining announced a new $600 million shelf filing, indicating plans to continue its aggressive expansion in power acquisition. This is seen as a crucial step for the company's growth in both high-performance computing (HPC) and Bitcoin mining.
With a clear path to reaching 35 EH/s by the end of 2025 and access to over 2.6 GW of power, the firm's growth prospects and potential in AI/HPC are considered to be undervalued compared to its peers.
In other recent news, Cipher Mining raised its equity offering capacity to $725.7 million through an amended agreement with financial firms including Cantor Fitzgerald & Co. and BTIG, LLC. This move, which allows for an additional $600 million in shares to be offered, aligns with the company's growth objectives in the competitive cryptocurrency industry.
Cipher Mining has also announced its acquisition of a new 300 MW development site in West Texas for $67.5 million, expanding its long-term power asset pipeline to over 2.5 GW across 10 sites. Despite a net loss of $15 million in the second quarter, the company mined 563 Bitcoin, generating $37 million in revenues, and currently holds 2,270 Bitcoin.
Analysts from firms such as H.C. Wainwright, Canaccord Genuity, Compass Point, and Needham have expressed positive assessments of the company's prospects. Cipher Mining's plans to increase its hash rate to 35 exahashes per second by 2025 have been highlighted, along with its ventures into High-Performance Computing (HPC) infrastructure.
InvestingPro Insights
As Cipher Mining Technologies Inc. (NASDAQ:CIFR) forges ahead with its expansion plans, recent data from InvestingPro provides a valuable snapshot of the company's financial health and market performance. The company's market capitalization stands at $1.07 billion, reflecting investor confidence despite recent volatility. Cipher's forward-looking P/E ratio is 54.41, which could suggest expectations of earnings growth, especially when considering that the company's net income is expected to grow this year, as indicated by one of the InvestingPro Tips.
Moreover, the company's revenue growth over the last twelve months has been robust at 182.55%, a testament to its operational scaling. However, it's important to note that Cipher Mining is trading at a high earnings multiple, which is echoed by a P/E ratio adjusted for the last twelve months as of Q2 2024 at 65.02. This could indicate that the stock is priced optimistically relative to its earnings. On the liquidity front, Cipher holds more cash than debt, which is a positive sign for the company's balance sheet and could provide some resilience against market downturns.
For potential investors and current shareholders seeking a more comprehensive analysis, there are over 15 additional InvestingPro Tips available, including insights on the company's cash burn rate and valuation implications. Readers can access these valuable tips by visiting the InvestingPro platform for Cipher Mining.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.