Key Takeaways
- B. Riley cut its CleanSpark price target to $21 from $26 on Oct. 30 and kept its Buy rating. The new target is still 156% above Thursday’s close, after a 57% drop over the past year.
- Bitcoin mining no longer earns enough to cover depreciation on CleanSpark’s machines, and $2.28 billion of new debt is paying to build its first AI data center.
- In July, B. Riley valued two Texas campuses that have no signed lease at a combined $10.9 billion, well above the $6.3 billion it gave the Georgia campus that has one.
- Analyst estimates are still falling, and B. Riley’s July case leaned on Texas leases nobody has signed, so a signed lease there is what to wait for.
CleanSpark (CLSK) is down 57% over the past year, and one of its bulls just trimmed its target. On Oct. 30, B. Riley cut its price target to $21 from $26 and kept its Buy rating.
That’s still 156% above Thursday’s close of $8.20:
Mining Stopped Paying for Its Machines
The slide started with bitcoin. CleanSpark said in its fiscal third-quarter release on Aug. 6 that revenue fell 30.5% from a year earlier, to $138.0 million in the June quarter. Gross profit was $52.5 million, against $110.4 million of depreciation on its miners and other equipment.
Then came the debt. In September, a CleanSpark subsidiary sold $2.28 billion of 7.875% senior secured notes to build its data center campus in Sandersville, Georgia, which is leased to a Meta Platforms unit. That took its debt principal to about $4.1 billion.
B. Riley’s Case Runs Through Texas
At the end of July, when B. Riley raised its target to $26, its sum-of-the-parts model valued Sandersville at about $6.27 billion. CleanSpark had signed a 20-year, $6.6 billion lease there that month.
It put another $3.89 billion on the Sealy campus and $7.02 billion on Brazoria County, both in Texas. Neither has a signed lease, though Meta’s unit holds exclusivity on up to 885 MW in Texas, and B. Riley called turning that into leases a key catalyst. (That July note also disclosed investment-banking fees from CleanSpark over the prior year.)
TIKR Tracks 15 Analysts on CleanSpark. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on CleanSpark, 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 CleanSpark’s Analyst Ratings
Does $21 Add Up?
The 15 analysts’ average target was $23 on Oct. 27, about where it was a year ago, even though the stock lost more than half its value:
Their targets run from $19 to $27, so B. Riley sits in the lower half.
The estimates have moved more. Analysts now expect a loss of $1.75 a share for the fiscal year ending September 2027, against $1.02 just 90 days ago. They also expect revenue to barely grow until Sandersville’s first hall comes online in fiscal 2028:
And the $626.4 million expected for fiscal 2027 is 19% below the June 30 estimate.
On Oct. 22, the stock traded near its five-year average of about 3.5x forward sales, so it isn’t expensive. That leaves Texas carrying the call.
CleanSpark Has to Sign Texas First
Texas isn’t making that easy. On Sept. 21, Gov. Greg Abbott ordered the state’s environmental regulator to pause permits for data center projects until a grid audit is done, and ERCOT’s report is due by Dec. 10. CleanSpark also owes $650 million on convertible notes due in 2030, and the stock sits far below their $14.80 conversion price.
B. Riley’s July model put more value on Texas, where nothing is signed, than on the leased Georgia campus, and coverage of the cut doesn’t say what changed at $21. With Texas data center permits on hold, I’d want a signed lease before buying. Fiscal fourth-quarter results, expected in late November, are the next place to look for one.
So what is CleanSpark 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!
