CleanSpark, a small-cap cryptocurrency miner that has been making some waves in the industry. Originally starting out as an advanced energy technology company, CleanSpark shifted its focus to Bitcoin mining after acquiring ATL Data Centers in 2020. Since then, the company has been expanding its facilities and investing in more mining machines to keep up with the growing demand.
In their May 2023 update, CleanSpark revealed that they mined a whopping 609 Bitcoins, each valued at around $27,400. Out of that, they sold 471 Bitcoins, earning approximately $12.9 million. Not only that, but the company also earned recognition, ranking 44th on the Financial Times’ list of the 500 Fastest Growing Companies in the Americas and 13th on Deloitte’s Fast 500.
When it comes to revenue, CleanSpark has shown steady growth, with a 14.2% increase in the second quarter of fiscal 2023, reaching $42.5 million. This positive trend began when the company shifted its focus to Bitcoin mining. However, it’s important to note that revenue depends on both the number of coins produced and their market value, which is influenced by external factors.
CleanSpark’s CEO, Zach Bradford, remains optimistic about the company’s future. They are expecting rapid growth over the next few quarters and aim to double their hash rate by the end of the year. To achieve this, CleanSpark has secured about 99% of the machines needed and is making progress in expanding their infrastructure.
It’s worth mentioning that CleanSpark doesn’t necessarily sell all the Bitcoins it mines. At the end of the second quarter, they held approximately $15 million in cash and 196 Bitcoins.
While revenue growth looks promising, CleanSpark has yet to demonstrate consistent profitability over consecutive quarters. The company’s adjusted EBITDA and earnings per share have been on a downward trend, which raises some concerns. Factors such as increased depreciation and amortization expenses due to significant investments in mining equipment have contributed to these figures.
Cost management is crucial for achieving positive earnings per share, and CleanSpark has made efforts in this area. They have reduced their net loss from discontinued operations and provided stock-based compensation to employees. However, there have been some notable expenses, including legal fees and stock issuances that have resulted in dilution.
From a valuation standpoint, CleanSpark’s current financials make it challenging to determine metrics like the P/E and PEG ratios. The company’s share price hasn’t seen significant upward movement despite its growth potential, and it remains to be seen whether consecutive quarters of profitability will positively impact the share price.
Different perspectives exist regarding CleanSpark’s potential. SeekingAlpha analysts give the company a Buy rating, while Wall Street analysts and the Quants rate it as a Strong Buy. Institutional funds also hold a substantial percentage of the company’s shares, indicating confidence from professionals in the industry.
