timothy sykes logo

Stock News

Is It Too Late to Buy CleanSpark Inc. Stock?

Timothy SykesAvatar
Written by Timothy Sykes
Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs

CleanSpark Inc. is experiencing notable market movements, with its stock trading up by 9.1 percent on Thursday. This surge can be attributed to positive sentiment from recent news, particularly reports highlighting their innovative advancements in sustainable energy solutions and strategic partnerships in the renewable sector. The company’s proactive approach to cutting-edge technology and market expansion continues to garner investor confidence, driving the stock’s upward trajectory.

In an ever-evolving market, is CleanSpark a hidden gem or a missed opportunity?

Candlestick Chart

Live Update at 11:10:08 EST: On Thursday, September 26, 2024 CleanSpark Inc. stock [NASDAQ: CLSK] is trending up by 9.1%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Recent Developments

Post image

Get my weekly watchlist, free

Sign up to jump start your trading education!

  • CleanSpark is a leading player in the bitcoin mining sector, showing remarkable growth and outpacing competitors, with optimism about bitcoin’s price reaching $185,000.
  • Energizing the 50 MW final phase of its 150 MW expansion in Georgia, targeting 37 EH/s by year’s end after acquiring seven facilities in Tennessee.
  • CleanSpark acquired two Bitcoin mining sites in Mississippi and closed a second site in Wyoming, enhancing its portfolio and mining capacity.
  • Macquarie started coverage on CleanSpark with an Outperform rating and a $20 price target, citing strategic acquisitions and commitment to sustainability.

Quick Overview of CleanSpark’s Recent Earnings Report and Key Financial Metrics

CleanSpark Inc. has been on a roller-coaster ride lately. Their stock price soared recently to close at $10.19 on 26 Sep 2024, just days after reaching a low of $8.99 on 20 Sep 2024. This volatility is not just a market spasm; it’s fueled by tangible developments and hard numbers. Let’s break it down.

CleanSpark has been making waves in the bitcoin mining space. Their latest quarterly revenue stands tall at $104.11M, but with it comes total expenses clocking in at $115.66M. Essentially, they are burning cash. What’s startling is their net income from continuing operations, ringing a loss of $236.24M. This might sound alarming, but there’s more to the story.

More Breaking News

A Closer Look at Financial Strength

Nosy into CleanSpark’s key ratios reveals some eyebrow-raising stats:
– The EBIT margin is -37.2%, and the EBITDA margin is even more dismal at -54.3%.
– Gross margin is a bright spot, sitting pretty at 50.5%, a silver lining in a cloudy financial picture.

Interestingly, the company’s current ratio is at a robust 8.9, indicating they have more than enough assets to cover their short-term liabilities. However, their return on assets (ROA) and return on equity (ROE) are both skating on thin ice at -11.83% and -16.14%, respectively. In simple terms, CleanSpark needs to do some soul-searching on how to turn its assets into profit.

Profitability Metrics and Valuation Measures

Even a quick step into valuation metrics paints a stark reminder of today’s challenging climate. With a price-to-book ratio of 1.65 and an enterprise value standing firm at $2.20B, CleanSpark wields significant capital muscle. However, the price-to-sales ratio is a cringeworthy 6.76, and the price-to-cash flow is a painful -8.5. This means that for every dollar of sales, investors are paying a hefty premium, expecting future growth.

Cash Flow Challenges

CleanSpark’s financial reports for the last quarter highlight a daunting cash flow scenario, with operating cash flow scraping the bottom at -$68M and investing cash flow at -$272.13M. The free cash flow stands at a dismal -$79.38M. However, they raised $150.97M from stock issuance, showing resilience in capital fundraising.

Key Acquisitions and Expansions

CleanSpark’s aggressive expansion strategy is all over the headlines. The company recently energized its 50 MW final phase at its Sandersville, GA location, bumping up their hashrate significantly. The company further expanded by acquiring seven facilities in Tennessee, projecting to up their operating hashrate by over 22%.

Additionally, they extended their footprint into Mississippi and Wyoming, bolstering their data-center and mining capabilities. These acquisitions position CleanSpark strategically in the mining landscape. The market has responded positively, propelling their stock price upwards.

Making Sense of the Volatility

With the latest trading data, CleanSpark’s stock price has experienced remarkable jumps and dips. Opening at $9.76 on the 26 Sep and closing at $10.19, it demonstrated a spiking uptrend. This could be linked to key news developments and strategic expansions whispering confidence in investors’ ears.

What Analysts Are Saying

Macquarie initiating coverage with an Outperform rating and a bullish $20 price target has attracted investor attention. Analysts praise CleanSpark’s opportunistic acquisitions and its commitment to sustainability, mixed with strategic geographical positioning, implying optimism for future growth.

Market Predictions Based on Key Financial Ratios and Reporting Data

CleanSpark’s aggressive acquisitions are a double-edged sword. While they ramp up infrastructure and potential mining power, they also drain capital reserves, amplifying risks. However, their large gross profit margins and strong current ratio present resilience against short-term financial hiccups.

Key Takeaways from the Latest Developments

CleanSpark’s Dominance in Bitcoin Mining Sector:

CleanSpark is flexing its muscles in the bitcoin mining sector, outshining competitors. Their optimism about bitcoin’s potential to hit $185,000 echoes their growth prospects. This bold prediction serves as a bullish signal to investors, pushing the stock price upwards. The excitement around bitcoin’s bullish sentiment fuels CleanSpark’s market presence, driving stock volatility.

Strategic Acquisitions and Expansions:

The company’s recent acquisition of seven facilities in Tennessee and additional sites in Mississippi and Wyoming underscores an aggressive growth strategy. These moves are not just about increasing hashrate; they’re about cementing CleanSpark as a dominant player in geographically diverse locations.

Energizing Expansion in Sandersville, Georgia:

CleanSpark’s recent completion of the 150 MW expansion in Sandersville, GA, marks a pivotal milestone. With a targeted hashrate of 37 EH/s by year-end, this expansion bolsters their mining capacity, positioning CleanSpark favorably against industry peers.

Macquarie’s Rating and Price Target:

Macquarie’s Outperform rating and $20 price target have injected positive market sentiment. This endorsement underscores the strategic vision and sustainability focus, enticing investors to view CleanSpark as a promising player in the bitcoin mining sphere.

Financial Metrics Roundup

Cash Flow and Liquidity:

Despite a challenging cash flow scenario, CleanSpark’s ability to raise capital underscores investor confidence. A robust current ratio of 8.9 indicates strong liquidity, presenting a cushion against financial strains.

Profitability and Margins:

Although net income and EBITDA margins point to operational losses, the substantial gross margin of 50.5% highlights efficient cost management in core operations. This mixed bag of profitability metrics reveals areas of strength and weakness.

Valuation Concerns:

CleanSpark’s price-to-sales and price-to-cash flow ratios indicate a high premium paid by investors. However, the enterprise value demonstrates the market’s belief in CleanSpark’s potential growth trajectory.

The Bigger Picture—What Lies Ahead for CleanSpark?

CleanSpark Inc. finds itself at a crossroads. The company’s bold moves in expanding and acquiring new facilities indicate a long-term strategic vision. However, these ambitious expansions are capital-intensive, straining cash flows.

The volatility in CleanSpark’s stock price reflects the market’s grappling with these mixed signals. On one side, you have a company expanding aggressively, signaling growth. On the other, you have financial metrics painting a picture of operational and cash flow challenges.

Final Insights: A Balancing Act

Investors eyeing CleanSpark must navigate a landscape of high perplexity and burstiness. The key is balancing the bullish sentiments around bitcoin’s potential and CleanSpark’s growth ambitions against the backdrop of financial strains and operational losses.

As CleanSpark continues to expand its mining capacity and geographical footprint, the stock market will keenly watch how these moves translate into financial performance. For now, CleanSpark remains a volatile yet intriguing play in the bitcoin mining sector.

In summary, is it too late to buy CleanSpark Inc. stock? The answer lies in your risk tolerance and belief in their growth story amidst a turbulent financial climate. Investors must weigh their optimism about bitcoin and CleanSpark’s expansions against current financial challenges. Only time will tell if CleanSpark’s strategic moves will bear the fruits that justify the market’s high expectations.

Curious about this stock and eager to learn more? Dive deeper into the world of trading with Timothy Sykes, renowned for his expertise in penny stocks. Explore his top picks and discover the strategies that have propelled him to success. Start your journey towards financial growth and trading mastery!

But wait, there’s more! Elevate your trading game with StocksToTrade, the ultimate platform for traders. With specialized tools for swing and day trading, StocksToTrade harnesses the power of Artificial Intelligence to guide you through the market’s twists and turns. Discover insights on Robinhood penny stocks and top biotech picks to fuel your trading journey:

Ready to embark on your financial adventure? Click the links and let the journey unfold.


How much has this post helped you?


Leave a reply

Author card Timothy Sykes picture

Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”