CleanSpark Inc.

Analysis of CleanSpark (CLSK)

Technical Perspective CLSK is in a pronounced downtrend, having lost approximately 30% of its value over recent months and significantly underperforming the market. The stock appears technically oversold, trading near the lower end of its 52-week range, but its exceptionally high beta of 3.5 indicates extreme volatility is likely to persist. While this oversold condition might attract speculative traders, the price action reflects severe negative momentum.

Fundamental Perspective The company's fundamentals are deeply concerning, characterized by a massive net loss in the last quarter and alarmingly negative cash flow from operations. While its strong liquidity position with a high current ratio prevents immediate solvency risk, the severe operational inefficiencies and negative returns on equity suggest a fundamentally broken business model. The improved gross margin is completely overshadowed by spiraling expenses.

Valuation and Risk Valuation is challenging as traditional metrics are meaningless due to the lack of profitability. The primary risk is the extreme volatility (Beta of 3.5), which exposes investors to the potential for swift, substantial capital depreciation, as evidenced by the -64% max drawdown. Without clear industry comparables, it is difficult to ascertain any relative value or catalyst for a turnaround.

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Investment Recommendation

Based on the analysis, CLSK is not a recommended buy at this time. The combination of severe technical weakness, deeply negative profitability, and cash burn presents a highly speculative and risky profile. While the stock is oversold, the fundamental issues appear structural, and the extreme volatility makes it unsuitable for most investors. A potential investment would require clear evidence of a sustainable operational turnaround and a significant reduction in its cash burn rate before consideration.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the provided analysis, the 12-month outlook for CleanSpark (CLSK) is highly speculative and weighted toward the downside.

Key Catalysts: A near-term catalyst could be a technical bounce from its deeply oversold condition, which might attract speculative traders. The primary fundamental catalyst would be definitive evidence of a sustainable operational turnaround, specifically a path to profitability and a significant reduction in its cash burn rate.

Potential Risks: The risks are substantial and include the continuation of its severe downtrend, the possibility of further capital erosion due to its extreme volatility (Beta of 3.5), and the structural challenges of its unprofitable business model and negative cash flow.

Target Price Range: With no analyst target price available and a fundamentally broken business model, establishing a reliable target range is not feasible. The path of least resistance appears lower unless the company demonstrates a drastic operational improvement.

Wall Street Consensus

Most Wall Street analysts are optimistic about CleanSpark Inc.'s 12-month outlook, with consensus target around $9.82, indicating expected upside potential.

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

CLSK has demonstrated severely negative performance over recent periods, characterized by substantial declines and extreme volatility relative to the market.

The stock has posted significant short-term losses, declining approximately 30% over both the one-month and three-month periods. Its negative relative strength of -30.96% confirms it is substantially underperforming the broader market during this time frame. This underperformance is exacerbated by its high beta of 3.497, indicating its movements are far more volatile than the market.

Currently priced at $9.27, CLSK sits in the lower 41st percentile of its 52-week range, closer to its low of $6.45 than its high of $23.61. Given the severe max drawdown of -64.38% and the recent sharp decline, the stock appears to be in an oversold condition, though its high beta suggests potential for continued sharp price swings.

Revenue & Profitability CLSK demonstrates unstable profitability with a dramatic swing from Q4 2025's marginally negative net income (-$0.9M) to a substantial net loss of -$378.7M in Q1 2026, driven by a massive $381M in other expenses. The company's gross profit margin improved significantly to 47.2% in the most recent quarter from a negative margin in the prior period, but this was entirely offset by heavy operating and other expenses, resulting in a deeply negative net profit margin of -209%.

Financial Health The company exhibits an exceptionally strong liquidity position with a current ratio of 10.54 and a substantial cash ratio of 3.28, indicating minimal near-term solvency risk. However, its cash flow situation is alarming, with a deeply negative operating cash flow per share of -$0.57 and a cash flow to debt ratio of -63.6, suggesting the company is burning cash to service its minimal debt burden.

Operational Efficiency CLSK's operational efficiency is severely challenged, as evidenced by a deeply negative return on equity of -27.4% and a weak asset turnover of just 0.05 in Q1 2026. The extremely low fixed asset turnover of 0.13 indicates poor utilization of capital assets, reflecting significant operational inefficiencies and an inability to generate adequate returns from its invested capital base.

Valuation Level: CLSK's negative TTM and forward PE ratios indicate the company is currently unprofitable, making traditional PE-based valuation meaningless. The negative EV/EBITDA further confirms fundamental profitability challenges. Valuation cannot be properly assessed using earnings-based metrics until the company achieves profitability.

Peer Comparison: Without industry average data for comparison, a relative valuation assessment cannot be made. The absence of comparative benchmarks prevents determination of whether CLSK's current multiples represent a premium or discount to sector peers. Professional analysis would require relevant industry comps to contextualize these metrics.

Based on the provided metrics, CLSK exhibits exceptionally high volatility risk. The Beta of 3.497 indicates the stock is dramatically more volatile than the broader market, often moving more than three times as much. This extreme sensitivity is corroborated by a severe one-year maximum drawdown of -64.38%, highlighting the potential for substantial capital depreciation within a short period.

The stock also faces significant market structure risks. While the absence of reported short interest suggests a lack of concentrated betting against it, a Beta this high often implies potential liquidity challenges, where large trades could cause sharp price swings irrespective of short activity. The extreme volatility itself represents the primary ongoing risk, overshadowing other structural concerns.