On Wednesday, Compass Point updated its financial outlook for shares of IREN Ltd. (NASDAQ: IREN), increasing the price target to $25.00 from the previous $16.00.
The firm has sustained a Buy rating on the shares of the cryptocurrency mining company, which currently trades at $13.73 and has delivered an impressive 128.83% return over the past year. According to InvestingPro data, analyst targets for IREN range from $15 to $26, suggesting significant upside potential.
The adjustment in the price target comes after IREN reported its November production and announced a significant increase in its installed capacity. The company is expected to reach approximately 31 EH/s in hash rate by the end of the year, up from the current 28 EH/s.
This growth is partly due to the planned installation of the remaining 20 EH/s of S21 Pro miners, recognized for their industry-leading efficiency. The company's operational excellence is reflected in its impressive 87.67% gross profit margin and strong revenue growth of 119.92% over the last twelve months.
Compass Point highlights the value of IREN's datacenter assets, which support its position as a leading Bitcoin miner. The firm's economics are bolstered by a robust megawatt pipeline that, according to Compass Point, is undervalued when compared to peers in the industry that are also exploring high-performance computing (HPC) possibilities.
The revised price target is based on a 9x EV/EBITDA multiple on revised CY25 adjusted EBITDA estimates. Compass Point's valuation reflects the potential of IREN's datacenter assets and its ability to deliver approximately 700MW of IT load from its approximately 1.4GW site. This is notably inexpensive at an estimated 4.1 times enterprise value per megawatt, especially when contrasted with the average of 10 times EV/MW outside of real estate investment trusts (REITs).
Additionally, the analyst points out that while not included in the current estimates, IREN's 1.4GW Sweetwater site could represent an added value of approximately $25 per share. This is under the assumption that the site can be converted for HPC use, which is anticipated to be in demand by Hyperscaler customers in the forthcoming years.
The site's potential was assessed on a conservative cost plus an 8% lease structure. With a market capitalization of $2.94 billion and EBITDA of $20.98 million, InvestingPro analysis suggests the stock is slightly undervalued, with 14 additional exclusive insights available to subscribers, including detailed profitability metrics and growth forecasts.
In other recent news, Iris Energy Ltd (NASDAQ:IREN). has experienced significant developments. JPMorgan (NYSE:JPM) downgraded Iris Energy's stock from Overweight to Neutral, although the price target was increased to $15.00.
Analysts at Canaccord Genuity and Cantor Fitzgerald maintained bullish ratings for the company, emphasizing its low-cost Bitcoin production and increased hash rate capacity. Iris Energy also announced plans for a $300 million convertible senior notes offering due in 2030, intending to use the proceeds for general corporate purposes and working capital.
The company has recently expanded into Cloud Services and is expected to launch a new 1.4 GW site in 2026. Iris Energy also continues to grow its operations, aiming to reach 50 EH/s in Bitcoin mining and increase its data center capacity to 810MW by 2025.
The first quarter of fiscal year 2025 showed strong financial performance, with an adjusted EBITDA of CAD 2.6 million, Bitcoin mining revenue of CAD 54.3 million, and AI cloud services revenue of $3.2 million. These are among the recent developments that highlight Iris Energy's strategic growth and operational efficiency.
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