As Bitcoin’s value has skyrocketed by over 160% in the past year, the spotlight is on crypto mining companies. Iris Energy (NASDAQ:IREN), a Bitcoin (BTC-USD) miner operating under the radar, offers a unique business model focused on selling mined Bitcoin. With a stock surge of over 100% in the past month and a robust growth projection for 2024, including a plan to triple its operational capacity, Iris Energy presents a promising investment opportunity within the blockchain sector.
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Iris Expanding Capacity
Iris Energy is a next-generation data center company based in Australia, leveraging 100% renewable energy sources to power Bitcoin mining and artificial intelligence (AI) operations. The company’s strategy addresses growing concerns about the environmental impact of energy-intensive crypto-mining operations and is predicted to meet increasing market demand.
Since starting operations in 2019, Iris Energy has provided security to the Bitcoin network and is set to expand to 30 EH/s in 2024. They have also been offering cloud computing to AI customers through 816 NVIDIA (NASDAQ:NVDA) H100 GPUs since launching these operations in 2024.
Iris Energy manages 260MW of operating data centers, with plans to expand to 510MW in 2024. These centers are built explicitly for high-performance and power-dense computing applications. Iris holds a development portfolio with 2,160MW of secured power capacity across North America and a property portfolio of over 1,000 acres. By targeting sites with low-cost and underutilized renewable energy, the company supports electrical grids and local communities with clean energy.
Iris has expanded its hashrate operating capacity from 10 EH/s to 30 EH/s. This has been made possible through a new substation design and improvements to the construction and procurement process. The company continues to construct market-competitive and cost-efficient operations, aiming to become one of the largest publicly-listed Bitcoin miners.
Analysis of Iris’ Recent Financial Results
Iris Energy recently released its Q3 FY24 results, revealing a solid performance. The company’s reported revenue of $54.35 million surpassed analysts’ expectations of $51.49 million. Bitcoin mining was a significant component of this success, yielding $53.4 million, a substantial rise from Q2’s $42 million. This increase was driven by a rise in operating hashrate and higher Bitcoin prices.
Further, the net profit of $8.6 million improved significantly from the loss of $5.2 million in the previous quarter. Earnings per share (EPS) of $0.077 slightly exceeded analysts’ consensus of $0.07.
The company’s financial health appears solid. Its year-to-date operating cash inflow of $47.9 million, significantly improved from the $1.0 million outflow in the first nine months of Fiscal 2023. As of March 31, 2024, the company had a substantial $259.7 million in cash and cash equivalents, with no outstanding debt.
What is the Price Target for IREN Stock?
Analysts following Iris Energy are bullish on the stock. For instance, JPMorgan analyst Reginald Smith recently raised the price target on the shares from $10 to $11 and kept a Buy rating, reflecting the company’s increased 2024 hashrate targets and modest changes in spot bitcoin prices.
Iris Energy is rated a Strong Buy based on the Buy recommendation assigned by five analysts over the past three months. The average price target for IREN stock is $12.20, which represents a possible upside of 18.1% from current levels.
The stock has been highly volatile but trending upward overall, climbing nearly 177% over the past year. IREN shares trade at the upper end of their 52-week price range of $2.79 to $11.50 and show positive price momentum, trading above the 20-day (7.71) and 50-day (6.51) moving averages.
Final Thoughts on IREN
Iris Energy’s compelling position in the blockchain sector and ambitious growth plan indicate the potential for significant revenue growth and strong cash flow. Cryptocurrency mining is highly speculative, so those considering this stock should be prepared for heightened volatility. However, investors looking for a blockchain opportunity with growth potential may find this one a compelling option.
