Key Takeaways
- Jefferies kept its Buy rating on Cipher Digital and cut its price target to $10 from $12. That’s still 53% above the Nov. 10 close, after the stock fell 78% from its June high.
- The selloff followed a zero-coupon note sale, cost overruns at Barber Lake and a Texas governor’s race won by a candidate who campaigned on halting data centers.
- After the third-quarter report, analysts cut their 2026 revenue estimate, while 2027’s still sits near $828 million, when rent from Cipher’s leased campuses should show up.
- Jefferies’ $10 is a far easier bar to clear than the Street’s $23 average, and the fourth-quarter report and Cipher’s next financing are the next tests.
Cipher Digital (CIFR) is down 78% from its June high, and even its bulls are lowering the bar. In a note on AI data centers, Jefferies’ Jonathan Petersen kept his Buy rating and cut his target to $10 from $12, still 53% above the stock’s $6.53 close on Nov. 10.
Costlier builds and a Texas surprise
In October, Cipher sold $850 million of zero-coupon convertible notes and swapped most of its 2030 notes for stock. Its Nov. 2 report then showed its first data center rent, $5.9 million, and Barber Lake ran over budget. On the call, CFO Greg Mumford said that without the lease amendment Cipher struck with the tenant, “our cost would have been about $12.3 million per critical megawatt,” above Cipher’s own $9 million to $11 million range. The amendment, which doubled the lease to 20 years, pushed Cipher’s cost to about $13 million instead.
A day later, Gina Hinojosa won the Texas governor’s race. She had campaigned on halting new data center approvals until lawmakers pass protections. All three of Cipher’s leased campuses are in Texas, and Keefe Bruyette downgraded the stock over the election on Nov. 4.
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Does $10 add up?
Petersen adjusted his model for the election and for changes to tenant change orders, according to TheFly, but still sees Cipher as a “financeable platform” because its tenants are hyperscalers rated investment grade or backed by investment-grade entities.
Petersen’s $10 is 56% below the $23 consensus target, near the bottom of a range that runs from $9.50 to $59. The Street’s average target has slid to $23, its low for the past year, from $33 in early August.
Analysts have cut their 2026 revenue estimate since late October, but 2027’s still sits near $828 million, when rent from Cipher’s leased campuses should show up.
Consensus has $159 million of revenue for 2026, down from $216 million in late October, against $86.4 million booked through September. For 2027, it has $828 million, and Cipher has $16.6 billion of rent under contract.
Siding with Jefferies
The big risk is dilution. Cipher puts its own equity into each new build. Google’s warrants also come with a guarantee that they’ll be worth at least $430 million, so the lower the stock is when that’s tested, the more shares or cash Cipher owes.
Cipher can get back to $10 without analysts raising a single estimate. The Street’s $23 average, though, looks far too high with funding and Texas hanging over the stock. The fourth-quarter report early next year should show whether rent from Black Pearl and Barber Lake arrives on schedule. After that, the test is how Cipher pays its share of the next lease, and how much stock it sells to do it.
So what is Cipher Digital 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!
