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CleanSpark (CLSK) Loses 13% in a Month: Should You Buy the Dip?
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CleanSpark (CLSK - Free Report) shares have declined 13.3% in the past month. The Bitcoin miner has been suffering from the inherent volatility in the Bitcoin price, which is more than 21% off its record high of above $73,750 set in March.
The decline in the Bitcoin price has been attributed to supply overhang resulting from the offloading of Bitcoins, which was ceased during an investigation, by the Saxony state in Germany. Bankrupt exchange Mt. Gox’s announcement to repay crypto (140,000 Bitcoin) to its creditors has also hurt prices.
Despite the recent decline, CLSK shares have returned 35.6% year to date, outperforming its closest mining peers, Riot Platforms (RIOT - Free Report) and Marathon Digital (MARA - Free Report) . RIOT has dropped 39.58%, whereas MARA fell 17.05% over the same timeframe.
CleanSpark’s use of renewable energy and its aggressive expansion strategy have been the major growth drivers. In second-quarter fiscal 2024, CLSK reported revenues of $111.8 million, up a whopping 163% year over year and 52% sequentially. Adjusted EBITDA of $181.8 million jumped 163% quarter over quarter.
YTD Performance
Image Source: Zacks Investment Research
Facility Expansion Aids CleanSpark Stock’s Prospects
CLSK has been one of the highest producers of Bitcoin year to date primarily due to an impressive 63% surge in operating capacity. At the end of the fiscal second quarter, CleanSpark had 134,000 machines compared with 68,000 machines at the end of the year-ago period.
At the end of the fiscal second quarter, CleanSpark’s total capacity was more than 17 exahash per second (EH/s) distributed across eight owned and operated data centers in Georgia and Mississippi, and co-location facilities in upstate New York.
CLSK continues to acquire mining facilities with an agreement to buy two bitcoin mining locations in Wyoming, offering 75 MW of available power. The sites are expected to add 4.2 EH/s once fully operational. In June, it inked an agreement to acquire five turnkey bitcoin mining facilities in rural Georgia. The sites offer more than 3.7 EH/s upon the full installation of the latest generation S21 pro miners.
CleanSpark benefits from its focus on lowering costs and improving efficiency. The company has upgraded its machine fleet through the addition of S21 Pro miners, which significantly enhanced its mining capabilities by reducing costs per terahash. The upgrade induced a 17% increase in total purchased hashrate, adding 3.4 EH/s.
Lower costs of operation bode well for CleanSpark post-Bitcoin halving, which means that the reward for Bitcoin mining is cut in half. Halving takes place every four years and the policy helps Bitcoin counteract inflation by maintaining scarcity. However, halving hurts profitability by compressing margins. CleanSpark’s low-cost operational base makes it immune to this headwind.
Moreover, CLSK is expanding its footprint with the acquisition of GRIID Infrastructure for an enterprise value of $155 million. CleanSpark expects to add more than 400 MW in Tennessee over the next two years, making its total announced, planned and owned capacity at more than 1 GW infrastructure.
The rise in capacity will help CLSK catch up fast with its competitors RIOT, MARA and Core Scientific (CORZ - Free Report) . At the end of June, CleanSpark hit an operational hashrate of 20 EH/s with 152,505 machines deployed. In comparison, Riot Platforms, Marathon Digital and Core Scientific hit hashrates of 22.0 EH/s, 26.3 EH/s and 24.6 EH/s, respectively.
CleanSpark’s aggressive facility expansion strategy, as well as its low-cost operational base, makes it an attractive stock for long-term investors. The company plans to achieve the hashrate target of 32 EH/s at the end of this year and 50 EH/s in 2025, driven by facility expansion. CLSK’s strong liquidity position, with $681 million in cash and Bitcoin (6,591 as of Jun 30) holdings, is also noteworthy.
Conclusion
CleanSpark’s growth prospect is significantly dependent on Bitcoin’s price movement, which is expected to remain volatile in the near term. This makes CLSK a risky bet.
Q3 & Q4 Estimate Revisions Negative
Image Source: Zacks Investment Research
For third-quarter fiscal 20024, the Zacks Consensus Estimate for earnings is pegged at 4 cents per share, 13 cents down over the past 30 days. The consensus mark for fourth-quarter fiscal 2024 is pegged at a loss of 10 cents per share compared with earnings of 23 cents over the past 30 days.
CLSK has a Growth Style Score of F, which makes the stock unattractive for growth-oriented investors. A Value Style Score of F indicates a stretched valuation at this moment.
Moreover, the company’s shares are trading below the 50-day moving average, indicating a bearish trend.
CLSK Trades Below 50-Day SMA
Image Source: Zacks Investment Research
CleanSpark currently has a Zacks Rank #4 (Sell), which indicates that investors should stay away in the near term.
Image: Bigstock
CleanSpark (CLSK) Loses 13% in a Month: Should You Buy the Dip?
CleanSpark (CLSK - Free Report) shares have declined 13.3% in the past month. The Bitcoin miner has been suffering from the inherent volatility in the Bitcoin price, which is more than 21% off its record high of above $73,750 set in March.
The decline in the Bitcoin price has been attributed to supply overhang resulting from the offloading of Bitcoins, which was ceased during an investigation, by the Saxony state in Germany. Bankrupt exchange Mt. Gox’s announcement to repay crypto (140,000 Bitcoin) to its creditors has also hurt prices.
Despite the recent decline, CLSK shares have returned 35.6% year to date, outperforming its closest mining peers, Riot Platforms (RIOT - Free Report) and Marathon Digital (MARA - Free Report) . RIOT has dropped 39.58%, whereas MARA fell 17.05% over the same timeframe.
CleanSpark’s use of renewable energy and its aggressive expansion strategy have been the major growth drivers. In second-quarter fiscal 2024, CLSK reported revenues of $111.8 million, up a whopping 163% year over year and 52% sequentially. Adjusted EBITDA of $181.8 million jumped 163% quarter over quarter.
YTD Performance
Facility Expansion Aids CleanSpark Stock’s Prospects
CLSK has been one of the highest producers of Bitcoin year to date primarily due to an impressive 63% surge in operating capacity. At the end of the fiscal second quarter, CleanSpark had 134,000 machines compared with 68,000 machines at the end of the year-ago period.
At the end of the fiscal second quarter, CleanSpark’s total capacity was more than 17 exahash per second (EH/s) distributed across eight owned and operated data centers in Georgia and Mississippi, and co-location facilities in upstate New York.
CLSK continues to acquire mining facilities with an agreement to buy two bitcoin mining locations in Wyoming, offering 75 MW of available power. The sites are expected to add 4.2 EH/s once fully operational. In June, it inked an agreement to acquire five turnkey bitcoin mining facilities in rural Georgia. The sites offer more than 3.7 EH/s upon the full installation of the latest generation S21 pro miners.
CleanSpark benefits from its focus on lowering costs and improving efficiency. The company has upgraded its machine fleet through the addition of S21 Pro miners, which significantly enhanced its mining capabilities by reducing costs per terahash. The upgrade induced a 17% increase in total purchased hashrate, adding 3.4 EH/s.
Lower costs of operation bode well for CleanSpark post-Bitcoin halving, which means that the reward for Bitcoin mining is cut in half. Halving takes place every four years and the policy helps Bitcoin counteract inflation by maintaining scarcity. However, halving hurts profitability by compressing margins. CleanSpark’s low-cost operational base makes it immune to this headwind.
Moreover, CLSK is expanding its footprint with the acquisition of GRIID Infrastructure for an enterprise value of $155 million. CleanSpark expects to add more than 400 MW in Tennessee over the next two years, making its total announced, planned and owned capacity at more than 1 GW infrastructure.
The rise in capacity will help CLSK catch up fast with its competitors RIOT, MARA and Core Scientific (CORZ - Free Report) . At the end of June, CleanSpark hit an operational hashrate of 20 EH/s with 152,505 machines deployed. In comparison, Riot Platforms, Marathon Digital and Core Scientific hit hashrates of 22.0 EH/s, 26.3 EH/s and 24.6 EH/s, respectively.
CleanSpark’s aggressive facility expansion strategy, as well as its low-cost operational base, makes it an attractive stock for long-term investors. The company plans to achieve the hashrate target of 32 EH/s at the end of this year and 50 EH/s in 2025, driven by facility expansion. CLSK’s strong liquidity position, with $681 million in cash and Bitcoin (6,591 as of Jun 30) holdings, is also noteworthy.
Conclusion
CleanSpark’s growth prospect is significantly dependent on Bitcoin’s price movement, which is expected to remain volatile in the near term. This makes CLSK a risky bet.
Q3 & Q4 Estimate Revisions Negative
For third-quarter fiscal 20024, the Zacks Consensus Estimate for earnings is pegged at 4 cents per share, 13 cents down over the past 30 days. The consensus mark for fourth-quarter fiscal 2024 is pegged at a loss of 10 cents per share compared with earnings of 23 cents over the past 30 days.
CLSK has a Growth Style Score of F, which makes the stock unattractive for growth-oriented investors. A Value Style Score of F indicates a stretched valuation at this moment.
Moreover, the company’s shares are trading below the 50-day moving average, indicating a bearish trend.
CLSK Trades Below 50-Day SMA
CleanSpark currently has a Zacks Rank #4 (Sell), which indicates that investors should stay away in the near term.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.