Bitcoin has been on a tear recently and has surged past its all-time high. The ripple effect is being felt by a plethora of companies associated with the leading cryptocurrency.
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One of these is CleanSpark (CLSK). The microgrid software specialist’s recent purchase of bitcoin miner ATL Data Centers has provided a serious boost, and shares are up 115% since the start of the month.
The acquisition is already yielding results; Last Friday, CleanSpark announced it had mined 10 bitcoins in December (1 bitcoin is currently worth roughly $23,700). The company also said it had put in an order for 500 extra mining units which will be placed at the ATL location in Atlanta, GA and are expected to arrive in mid-January.
The news followed the release of the company’s latest quarterly results. In F4Q20, revenue hit $1.95 million, indicating ~16% year-over-year drop and missing the estimates by $0.17 million. While earnings came in at a loss of $0.14 per share, the figure beat the Street’s call by $0.10, and significantly improved last year’s EPS loss of $2.59 for the same period.
Overall, in FY20, CleanSpark saw revenue increase by 122% to $10 million, more than doubling for the third consecutive year.
Looking ahead, CleanSpark expects revenue of $28 million for FY2021. This forecast is based on the core Energy and Digital Agency segments bringing in $20 million, and the recently acquired bitcoin mining operation adding another $8 million.
Amit Dayal’s estimates are roughly the same. The H.C. Wainwright analyst expects any deviations – higher or lower – to be due to bitcoin price fluctuations.
Although going by Dayal’s outlook, the analyst is anticipating upward movement with a strong 2021, further building on the current momentum.
“We believe the company’s core energy and software business could benefit from improving sales cycles as COVID-19 related execution headwinds subside,” the 5-star analyst said. “We are projecting blended gross margins to be 43.8% during FY2021 and expect these to increase to over 55.0% in FY2022 and beyond boosted by the bitcoin business and supported in later years by higher software revenues… Other catalysts for FY2021 include potential new partnerships and acquisitions that should support product portfolio expansion and distribution.”
All in all, Dayal rate CLSK shares a Buy along with a $24 price target. (To watch Dayal’s track record, click here)
CleanSpark appears to be flying under the Street’s radar right now and Dayal’s is the only current analyst review. (See CLSK stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
