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Hut 8 (TSE:HUT)
TSX:HUT
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Hut 8
(TSX:HUT)
49Neutral
Positive Factors
Growth and Expansion
HUT has created multiple avenues for growth that include opportunities for developing and leasing AI data centers and its bitcoin mining operations.
Leadership and Management
New CFO Sean Glennan, with his background in Power, Utilities, and Renewables, is ideally suited to lead the financing of HUT's growing power pipeline.
Strategic Partnerships
Commercial agreements between HUT and American Bitcoin would provide the company with a stable, contracted revenue stream, including a colocation agreement under which HUT would host American Bitcoin’s mining rigs at existing and new colocation sites.
Negative Factors
Market Information
Color on lease timeline or prospective customer was limited for River Bend, Louisiana.
Market Volatility
The retracement in HUT's share price amid a decline in bitcoin price and AI space panic is seen as a compelling opportunity to buy into an intriguing firm at a bargain price.
Project Timelines
The estimate for the '26 HPC contribution has been lowered due to an overly optimistic prior timeline.
Hut 8 (HUT) vs. S&P 500 (SPY)
Market Cap
C$1.75B
Dividend YieldN/A
Average Volume (3M)1.63M
Price to Earnings (P/E)3.6
Beta (1Y)2.00
Revenue Growth199.41%
EPS GrowthN/A
CountryCA
Employees222
SectorFinancial
Sector Strength84
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)4.67
Shares Outstanding103,855,680
10 Day Avg. Volume1,789,424
30 Day Avg. Volume1,627,246
Financial Highlights & Ratios
PEG Ratio0.00974
Price to Book (P/B)N/A
Price to Sales (P/S)7.39
Price to Cash Flow (P/CF)-13.90
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$41.09Price Target Upside143.57% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
Hut 8 Business Overview & Revenue Model
Company DescriptionHut 8 Mining Corp. operates as a cryptocurrency mining company in North America. The company engages in industrial scale bitcoin mining operations. It also owns and operates 38 BlockBoxes in Drumheller, Alberta; and 51 BlockBoxes in Medicine Hat, Alberta. Hut 8 Mining Corp. was incorporated in 2011 and is headquartered in Toronto, Canada.
How the Company Makes MoneyHut 8 generates revenue primarily through the mining of cryptocurrencies, particularly Bitcoin. The company's revenue model involves using advanced computing hardware to solve complex mathematical problems, which validate transactions on the Bitcoin network. For this, Hut 8 receives newly minted Bitcoins as block rewards. Additionally, Hut 8 may earn transaction fees associated with the validated transactions. Beyond mining, the company may engage in trading or holding cryptocurrencies on its balance sheet, potentially benefiting from appreciation in asset values. Hut 8's strategic partnerships with technology providers and energy suppliers also play a crucial role in optimizing operational efficiency and reducing costs, thereby enhancing profitability.
Hut 8 Financial Statement Overview
Summary
Hut 8's financial statements indicate challenges with profitability and cash flow, with a negative EBIT margin and significant cash outflows from operations. Despite a robust equity position, reliance on debt and negative cash flow metrics highlight financial instability. Improvement in operational efficiency and revenue growth is needed.Income Statement
The income statement shows a mixed performance with a gross profit margin of 25.87% in the latest annual report. However, the company is struggling with profitability, evidenced by a negative EBIT margin of -16.21% and a positive but low EBITDA margin of 1.66%. Revenue growth is inconsistent, with a drop from the previous period. This indicates potential challenges in maintaining stable revenue streams and controlling expenses.34
Negative
Balance Sheet
The balance sheet reflects a high debt-to-equity ratio of 0.42, indicating a moderate level of leverage. The equity ratio stands at 65.82%, suggesting the company is primarily financed through equity. Return on equity is relatively low at 2.56%, which may indicate inefficiencies in generating returns for shareholders.42
Neutral
Cash Flow
Cash flow analysis reveals significant cash outflows from operations, with an operating cash flow to net income ratio of -1.61. The free cash flow to net income ratio is also negative, indicating challenges in converting income into cash. Despite a substantial positive investing cash flow, the overall cash flow situation suggests liquidity concerns.28
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Jun 2023 | Dec 2019 | Dec 2018 | Dec 2017 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 193.18M | 81.80M | 150.68M | 81.99M | 49.44M | 6.74M | Gross Profit |
| 47.29M | 21.17M | -24.97M | 2.13M | -23.48M | 5.95M | EBIT |
| -38.54M | -13.26M | -90.96M | -2.66M | -49.11M | 1.38M | EBITDA |
| 8.81M | 1.36M | 3.57M | 30.40M | -2.76M | 2.30M | Net Income Common Stockholders |
| 261.86M | 16.45M | -242.81M | 2.13M | -136.77M | 567.07K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 636.90K | 47.36M | 30.52M | 2.95M | 3.56M | 23.25M | Total Assets |
| 642.25K | 976.87M | 412.94M | 71.24M | 82.90M | 45.58M | Total Debt |
| 0.00 | 268.75M | 47.42M | 26.04M | 32.37M | 0.00 | Net Debt |
| -636.90K | 227.93M | 16.90M | 23.09M | 28.81M | -23.25M | Total Liabilities |
| 2.60K | 333.87M | 55.55M | 28.54M | 50.24M | 9.07M | Stockholders Equity |
| 639.64K | 643.00M | 357.39M | 42.70M | 32.66M | 36.51M |
| Cash Flow | Free Cash Flow | ||||
| -70.75M | -27.30M | -177.74M | 5.27M | -91.14M | -3.41M | Operating Cash Flow |
| -51.00M | -26.48M | -105.03M | 14.51M | -6.77M | 49.24M | Investing Cash Flow |
| 162.27M | 87.25M | -103.61M | -9.73M | -90.16M | -52.67M | Financing Cash Flow |
| 125.04M | -33.45M | 99.83M | -5.39M | 77.24M | 142.92M |
Hut 8 Technical Analysis
Negative
16.87
Price Trends
21.77
Negative
28.73
Negative
24.23
Negative
Market Momentum
-1.35
Negative
42.60
Neutral
52.29
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HUT, the sentiment is Negative. The current price of 16.87 is below the 20-day moving average (MA) of 17.75, below the 50-day MA of 21.77, and below the 200-day MA of 24.23, indicating a bearish trend. The MACD of -1.35 indicates Negative momentum. The RSI at 42.60 is Neutral, neither overbought nor oversold. The STOCH value of 52.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:HUT.
Hut 8 Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Performance Comparison
TSE:HUT
Hut 8
16.87
6.86
68.53%
HIVE
HIVE Digital Technologies
1.48
-1.20
-44.78%
TSE:CSTR
CryptoStar Corp
0.02
-0.02
-50.00%
BITF
Bitfarms
0.80
-0.93
-53.76%
BRPHF
Galaxy Digital Holdings
10.98
2.30
26.50%
DMGGF
DMG Blockchain Solutions
0.16
-0.18
-52.94%
Hut 8 Earnings Call Summary
Earnings Call Date: Mar 3, 2025 | % Change Since: -20.91% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Positive
The earnings call reflects a company in transition, with significant revenue growth and strategic initiatives in AI and digital infrastructure. Despite some contract terminations and site shutdowns, the focus on capital efficiency and expansion into new markets and technologies suggests a positive outlook.Highlights
Revenue Growth
Hut 8's revenue grew 69% year-over-year to $162.4 million for the 12-months ended December 31, 2024.
Increase in Net Income and EBITDA
Net income was $331.4 million, and adjusted EBITDA was $555.7 million, both reflecting a gain on digital assets.
Capital Strategy and Institutional Ownership
Institutional ownership increased from approximately 12% to 55% by year-end, demonstrating a strong focus on long-term value creation.
Power Segment Performance
Power segment revenue more than doubled to $56.6 million, driven by increases in power generation and managed services revenue.
Digital Infrastructure Growth
Digital infrastructure segment revenue more than doubled to $17.5 million, with significant contributions from CPU and ASIC co-location services.
Strategic Developments in AI and HPC
Development of the Vega site remains on track for energization in Q2 2025, expected to generate approximately $125 million in annualized revenue.
River Bend Acquisition
Acquired a 300-megawatt utility-scale power asset in Louisiana, with plans for large-scale digital infrastructure development.
Lowlights
Termination of Contracts
Termination of the Ionic Digital contract and a $13.5 million termination fee from Marathon related to site exits.
Underperformance of Legacy Sites
Shutdown of the underperforming Drumheller site and relocation of fleet to owned facilities.
Challenges in Energy Cost Management
Adjustment in expected annualized revenue from the Vega site due to updated energy cost forecasts and potential curtailment.
Company Guidance
During the call, Hut 8 provided comprehensive guidance for the fiscal year 2024, focusing on key metrics and strategic initiatives. The company reported a 69% year-over-year revenue growth to $162.4 million and an adjusted EBITDA increase to $555.7 million. Hut 8's transformation centered around three main objectives: optimizing operations, fortifying capital strategy, and developing a utility-scale power origination pipeline. Operational optimization led to a 30% reduction in energy costs per megawatt hour and an 8-point increase in gross margin per Bitcoin mined. The capital strategy saw strategic deleveraging with the conversion of a $37.9 million digital loan to equity and increased institutional ownership to approximately 55% by year-end. The power origination pipeline expanded significantly, with capacity under exclusivity doubling to 2,800 megawatts. Hut 8 also restructured its reporting framework into three core segments—power, digital infrastructure, and compute—to better align with its business model and strategic priorities.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.