Key Takeaways
- Citi cut its CoreWeave price target to $128 from $159 on Wednesday but kept its Buy rating, which leaves 164% upside after the stock’s 65% fall from its May high.
- Rising interest costs, a slide in its bonds, Microsoft’s lighter-than-expected capital spending and the Democrats’ midterm wins all hit the stock.
- Citi’s target needs only CoreWeave’s average sales multiple of the past year, but analysts’ 2027 loss estimate keeps getting bigger.
- The stock looks unlikely to reach $128 within a year until CoreWeave’s operating profit starts catching up to its interest bill.
CoreWeave (CRWV) has lost 65% of its value since its May high, and Citi still thinks the stock can more than double.
Analyst Tyler Radke cut Citi’s price target to $128 from $159 on Wednesday, Nov. 4, and kept his Buy rating ahead of CoreWeave’s third-quarter report. That’s 164% above Wednesday’s $48.42 close, which capped a 9.9% drop on the day.
Investors Soured on CoreWeave’s Debt
CoreWeave pays for its buildout largely with debt, and the interest keeps climbing. Second-quarter interest expense hit $640 million, up from $267 million a year earlier, against $128 million of adjusted operating income. For the third quarter, management guided to $860 million to $940 million of interest against $200 million to $260 million of adjusted operating income. At the midpoints, that’s almost $4 of interest for every dollar of operating profit.
On Oct. 14, CoreWeave’s 9.625% notes due 2032 fell below 80 cents on the dollar.
On Oct. 28, Microsoft’s capital spending came in at $45.2 billion, short of the $50.7 billion analysts expected, and the company said some third-party capacity deliveries had slipped. That raised worries that AI infrastructure partners are taking longer to bring capacity online.
On Wednesday, the day after the Democrats’ midterm wins, data-center stocks fell on fears that new AI facilities could face construction limits. CoreWeave’s bonds hit new lows after candidates who favor slowing data-center construction won several governor’s races, including in Texas.
Demand Isn’t the Worry
CoreWeave’s revenue backlog was $104.2 billion at June 30, and that didn’t count more than $25 billion of new commitments added early in the third quarter.
“Our near-term capacity remains effectively sold out,” CEO Michael Intrator said on the second-quarter call. In July, CoreWeave raised prices about 25% across its offerings. It also lifted its 2026 revenue guidance to $12.4 billion to $13.2 billion.
TIKR Tracks 42 Analysts on CoreWeave. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on CoreWeave, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See CoreWeave’s Analyst Ratings
Does $128 Add Up?
Wall Street’s targets barely budged as the stock fell by more than half. The average target slipped to $135 from $142 a year ago:
Targets run from $39 to $278, and Citi’s $128 sits just under the average.
Analysts expect revenue to grow more than fivefold from 2025 to 2027:
Their 2027 forecast of $26.5 billion is up 47% in a year. The losses are growing too: the consensus 2027 loss has widened to $4.68 a share, from $3.69 three months ago.
Investors marked the stock down anyway, to about 1.4x forward sales, its low for the past year:
Citi’s $128 works out to 3.6x the roughly $36 of sales a share analysts expect over the next 12 months. That’s right at the stock’s average over the past year.
I’d Want to See the Operating Profit First
Price/sales doesn’t show depreciation or interest. In the second quarter, the two together took 79% of CoreWeave’s revenue.
I don’t see the stock reaching $128 within a year until CoreWeave’s operating profit starts catching up to its interest bill.
The first test is the third-quarter report on Tuesday, Nov. 10. Adjusted operating income above the guide, with interest no higher than forecast, would change my mind.
So what is CoreWeave stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
