CLSK

Comprehensive Analysis of CLSK

Technical Analysis CLSK has shown severe weakness, declining 37.5% over three months and underperforming the market by over 40 percentage points. With a beta of 3.5, it exhibits extreme volatility, though its current price near the midpoint of its 52-week range suggests a neutral technical stance. The stock remains high-risk due to its substantial drawdowns and inconsistent momentum.

Fundamental Analysis The company's fundamentals are concerning, with profitability swinging dramatically from a 54.6% gross margin in Q3 to -15.1% in Q4. While liquidity is strong with a current ratio of 4.18, negative operating cash flow and poor asset turnover indicate operational inefficiencies. High days sales outstanding and negative interest coverage further highlight core business challenges.

Valuation & Risk Valuation sends mixed signals: a low trailing P/E of 8.66 contrasts with a negative forward P/E and elevated EV/EBITDA of 38.53, suggesting earnings quality issues. Risks are pronounced, including extreme volatility (beta of 3.48) and a maximum drawdown of -58% over the past year. The lack of short interest data adds opacity to market sentiment.

Investment Recommendation CLSK is not recommended for purchase at this time. The stock's extreme volatility, unstable profitability, and weak cash flow generation present significant downside risks. While valuation metrics appear cheap superficially, they reflect underlying operational challenges rather than sustainable value. Investors should await clearer signs of business stabilization before considering exposure.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the comprehensive analysis, here is the 12-month outlook for CLSK (CleanSpark):

The primary catalyst for any potential recovery would be a significant, sustained rebound in bitcoin prices, which could improve mining profitability and cash flow. However, the outlook is clouded by substantial risks, including the stock's extreme volatility (beta of 3.5), persistent operational inefficiencies, and unstable profitability, as evidenced by the swing to a negative gross margin. Given the lack of a consensus analyst target and the concerning fundamentals, the risk-reward profile appears unfavorable; investors should expect continued high volatility with a potential for further downside unless the company demonstrates a clear and sustainable operational turnaround. A prudent target range is difficult to establish, but the stock is likely to remain highly sensitive to bitcoin market movements and company-specific execution risks.

Wall Street Consensus

Most Wall Street analysts are optimistic about CLSK's 12-month outlook, with consensus target around $13.34, indicating expected upside potential.

Overall, CLSK has investment potential but also faces challenges. Here are key factors to weigh before investing.

CLSK has demonstrated significant volatility with substantial losses over recent periods. The stock has dramatically underperformed the broader market while exhibiting extremely high volatility. Overall, the performance reflects a high-risk, underperforming equity.

Short-term performance has been notably weak, with the stock declining 15.3% over one month and 37.5% over three months. Furthermore, it has underperformed the market by over 40 percentage points during the last quarter, highlighting its significant negative alpha despite its high beta of 3.5.

Currently trading at $12.55, CLSK is situated roughly in the middle of its 52-week range. Based on this central positioning, the stock appears to be in a relatively neutral technical state, showing neither clear overbought nor oversold conditions in relation to its annual price band.

Revenue & Profitability CLSK demonstrates extreme volatility in profitability, with Q4 showing a negative gross margin of -15.1% compared to Q3's healthy 54.6% gross margin. This swing resulted in an operating loss of -28.2% in Q4 despite positive pre-tax income, indicating significant non-operating items drove the quarter's results. The inconsistent cost structure between quarters raises concerns about sustainable core operations.

Financial Health The company maintains a strong liquidity position with a current ratio of 4.18 and low debt ratios (debt-to-equity of 0.38). However, cash flow metrics are concerning, with negative operating cash flow per share of -$0.42 and negative cash flow to debt ratio of -0.14, suggesting difficulty servicing obligations from operations. The minimal cash ratio of 0.14 indicates limited immediate cash coverage despite overall liquidity strength.

Operational Efficiency Operational metrics reveal significant challenges, with ROE at -0.04% and asset turnover of just 0.07, indicating poor utilization of both equity and total assets. The 118.6 days sales outstanding suggests extended collection periods, while negative interest coverage of -12.5x reflects strained operational earnings relative to financing costs. These metrics point to fundamental inefficiencies in the company's core business model.

Valuation Level: CLSK demonstrates a complex valuation picture with its trailing PE of 8.66 appearing very attractive, but this is heavily contradicted by concerning negative forward earnings and weak earnings quality as evidenced by its high EV/EBITDA of 38.53 and elevated PEG ratio of 11.09. The stock appears moderately valued on a price-to-book basis at 1.41, but the elevated price-to-sales ratio of 3.99 alongside significant negative forward earnings suggests potential overvaluation concerns regarding its underlying profitability.

Peer Comparison: Without specific industry average data available for comparison, a definitive peer assessment cannot be established. However, the extreme disparity between its trailing and forward earnings metrics, coupled with the exceptionally high PEG ratio, signals potential fundamental issues relative to typical growth company benchmarks. This disconnect warrants careful scrutiny of the company's earnings trajectory and business model sustainability.

Based on the provided metrics, CLSK carries exceptionally high volatility risk. The beta of 3.482 indicates the stock is roughly 3.5 times more volatile than the broader market, meaning it is likely to experience significantly larger price swings, both upward and downward. This is corroborated by the extreme maximum drawdown of -58.06% over the past year, demonstrating a substantial historical loss from a previous peak and highlighting the potential for severe capital depreciation in a short period.

The absence of reported short interest data ("None") is unusual and warrants caution; it could indicate either a lack of available data or such minimal short activity that it's not reported, which limits insight into bearish sentiment. While low short interest can sometimes be seen as a positive, the lack of data itself is a risk factor as it obscures a key market dynamic. Furthermore, the extreme volatility suggested by the beta and drawdown implies potential liquidity risks, where large orders could disproportionately impact the stock's price due to a potentially thinner market.