Core Scientific, Inc.

Based on the provided analysis, Core Scientific (CORZ) presents a highly speculative and high-risk investment proposition.

Comprehensive Analysis: The stock exhibits extreme volatility, with recent price weakness but some positive momentum over a slightly longer period. Fundamentally, the company is in significant distress, with deeply negative profitability and substantial operational losses that render traditional valuation metrics meaningless. While liquidity appears adequate in the short term, the combination of severe cash burn, negative free cash flow, and inefficient asset utilization points to serious challenges for long-term sustainability. Valuation cannot be rationalized based on current earnings, and the extreme beta of nearly 7 signals enormous price swings relative to the market.

Buy Recommendation: We do not recommend buying CORZ stock. The extreme financial distress, complete lack of profitability, and unsustainable valuation metrics present an unacceptable level of risk for most investors. While the stock could experience sharp rallies due to its high volatility, these are unlikely to be supported by fundamental business improvement in the near term. This security is suitable only for investors with the highest risk tolerance who are speculating on a dramatic turnaround, and even then, it should constitute only a very small, speculative portion of a portfolio.

*Note: This is not investment advice, for reference only.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on the comprehensive analysis provided, here is a 12-month outlook for Core Scientific (CORZ):

Over the next 12 months, CORZ's trajectory is entirely dependent on a potential operational turnaround and external Bitcoin market dynamics. A key catalyst would be a significant and sustained rise in Bitcoin's price, which would boost the profitability of its mining operations and improve its cash flow situation. However, the primary risks are extreme and include the company's severe financial distress, persistent negative cash burn that threatens its viability, and the inherent volatility of its sole underlying asset, Bitcoin. Given the extreme risk profile and the inability to apply conventional valuation, a target price is not feasible; investors should expect continued extreme volatility where the potential for significant gains is matched by the risk of a total loss.

Wall Street Consensus

Most Wall Street analysts are optimistic about Core Scientific, Inc.'s 12-month outlook, with consensus target around $17.98, indicating expected upside potential.

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

Overall Assessment: CORZ has demonstrated significant volatility with moderately positive performance over recent months, though currently trading near the middle of its substantial 52-week range.

Short-term Performance: The stock has shown recent weakness with a 7.41% decline over the past month, but maintains positive momentum with a 6.39% gain over three months, notably outperforming the market by nearly 6 percentage points during this period despite its extreme beta of 6.885 indicating exceptional volatility.

Current Position: Trading at $17.49, CORZ sits approximately midway between its 52-week high of $23.63 and low of $6.20, suggesting neither overbought nor oversold conditions, though its maximum drawdown of -48.43% highlights the substantial risk inherent in this highly volatile security.

Revenue & Profitability CORZ shows concerning fundamentals with Q3 2025 revenue of $81.1 million representing modest sequential growth from Q2's $78.6 million. However, profitability metrics are severely negative, with gross profit margin deteriorating to just 4.7% in Q3 from 6.4% in Q2, while operating income ratio remains deeply negative at -80.7%. The company continues to report substantial losses with a net income margin of -180.8%, indicating significant operational challenges.

Financial Health The company maintains adequate liquidity with a current ratio of 1.58 and cash ratio of 0.68, suggesting sufficient short-term coverage. However, negative debt-to-equity ratios and concerning cash flow metrics raise questions about long-term sustainability. The operating cash flow to sales ratio of 1.62 appears strong, but negative free cash flow per share of -$0.39 indicates capital intensity challenges.

Operational Efficiency Operational efficiency metrics show mixed signals with a positive return on equity of 13.0% despite negative return on assets of -6.4%. Asset turnover remains low at 0.035, indicating inefficient utilization of the company's asset base to generate revenue. The negative cash conversion cycle of -247 days suggests favorable working capital management, though this must be balanced against the company's overall weak operational performance.

Valuation Level

CORZ's valuation metrics are highly anomalous, with a negative trailing PE of -8.09 and a negative forward PE of -9.74. A negative PE ratio indicates the company is reporting a net loss, rendering the traditional PE metric meaningless for valuation purposes as it signifies a lack of current earnings. The deeply negative EV/EBITDA of -49.59 further confirms severe operational distress, suggesting the company's enterprise value is not supported by its earnings before interest, taxes, depreciation, and amortization.

Peer Comparison

A direct peer comparison is not possible as industry average data is unavailable. However, the profoundly negative values across all key metrics (PE, PB, PEG, EV/EBITDA) are extreme outliers even for a distressed firm. This pattern strongly suggests CORZ's financial performance is fundamentally disconnected from its market valuation, which is typically unsustainable. Without industry context, the analysis conclusively points to a company in significant financial difficulty rather than one that is merely undervalued.

Volatility Risk CORZ exhibits extreme volatility risk with a beta of 6.885, indicating it is nearly seven times more volatile than the broader market. This is further evidenced by a severe one-year maximum drawdown of -48.43%, highlighting the potential for substantial capital depreciation during market downturns.

Other Risks The notable absence of reported short interest suggests a lack of significant bearish speculation, which can be a double-edged sword as it removes a potential source of buying pressure from short covering. The primary risk in this category likely stems from low trading liquidity, which can lead to wide bid-ask spreads and difficulty entering or exiting positions without impacting the share price.