On Thursday, H.C. Wainwright maintained a positive stance on CleanSpark Inc. (NASDAQ:CLSK), reiterating a Buy rating and a $27.00 price target for the company's stock. The endorsement follows CleanSpark's recent announcement on Wednesday, where the company increased its year-end 2024 guidance from 32 EH/s to 37 EH/s.
Additionally, CleanSpark revealed it has entered into definitive agreements to acquire seven turnkey Bitcoin mining facilities in the Knoxville, Tennessee area, boasting a total capacity of 85 megawatts (MW), for a sum of $27.5 million in cash.
The transaction price of approximately $323,500 per MW for the ready-to-operate infrastructure is noted as particularly favorable. This deal marks the lowest price per developed MW in any transaction within the sector for the year 2024. The acquisition demonstrates the company's proficiency in sourcing high-quality infrastructure at compelling valuations.
While details on the expected power costs at these sites were not disclosed, they are anticipated to be competitive, potentially ranging from the high 3 cents per kilowatt-hour (kWh) to low 4 cents per kWh. This would be an improvement compared to the approximately 4.5 cents per kWh power cost at CleanSpark's owned facilities for the first half of 2024.
Each of the seven sites is slated to close by or before September 25, 2024. They are set to contribute an additional 5 EH/s of Bitmain's S21 pro miners within the month. Notably, all mining rigs are already in possession and are expected to be operational immediately after each site's acquisition is finalized. Concurrently, CleanSpark is preparing to activate an extra 50 MW and around 3 EH/s of miners at its Sandersville, Georgia, facility this week.
With these strategic moves, CleanSpark is poised to significantly expand its total capacity by roughly 35% to 31 EH/s by the end of September, a considerable jump from the approximately 23 EH/s currently deployed. This expansion cements CleanSpark's position as the second-largest public miner in the industry. The firm's analyst emphasized the company's trajectory and potential, leading to the reaffirmation of the Buy rating and $27 price target.
In other recent news, CleanSpark Inc. has made substantial strides in its operations. The company has announced the acquisition of seven bitcoin mining facilities in Tennessee for a total investment of $27.5 million.
This strategic move is projected to add 85 megawatts of capacity to CleanSpark's operations and enhance its operational hashrate by over 22 percent. CleanSpark's Q2 revenue for fiscal year 2024 reached a record-breaking $111.8 million, marking a 163% increase from the previous year. Moreover, the company reported a net income of $126.7 million, a significant turnaround from the net loss of $18.5 million from the previous year.
CleanSpark has also been expanding its operations into Wyoming and Tennessee, securing power agreements for 75 megawatts in Wyoming and initiating operations in Tennessee under agreements with GRIID Infrastructure Inc. The company has appointed BDO USA, P.C. as its new independent registered public accounting firm, replacing MaloneBailey, LLP. In addition, Cantor Fitzgerald has adjusted its price target on CleanSpark to $24.00, while maintaining an Overweight rating.
InvestingPro Insights
As CleanSpark Inc. (NASDAQ:CLSK) continues to make strategic advancements in the Bitcoin mining industry, real-time data from InvestingPro offers additional perspectives for investors. With a market capitalization of $2.35 billion and a significant revenue growth of 140.89% over the last twelve months as of Q3 2024, CleanSpark shows a robust expansion in its financial metrics. Despite a negative P/E ratio of -10.92, the company's gross profit margin stands at an impressive 59.45%, indicating a strong ability to generate income relative to its revenue.
InvestingPro Tips highlight that CleanSpark holds more cash than debt on its balance sheet and is expected to see net income growth this year. Analysts also anticipate sales growth in the current year, which aligns with the company's recent increase in year-end 2024 guidance and its acquisition of seven turnkey Bitcoin mining facilities. While the stock has experienced volatility, with significant price movements over recent weeks and months, the company's liquid assets exceed its short-term obligations, suggesting financial resilience.
For investors seeking a more comprehensive analysis, InvestingPro features additional tips that could help in evaluating CleanSpark's potential as an investment. These insights are part of a larger suite of tools and data available to InvestingPro users, who can access further details at https://www.investing.com/pro/CLSK.
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