After facing a 50% share slump since short seller Culper Research publicly doubted the company’s Bitcoin mining profitability and the feasibility of its AI expansion, Iris Energy (IREN) responded by posting record revenue, which was driven by an impressive leap in data center expansion and Bitcoin mining efforts.
The company is now on a path to reach a 30 EH/s hash rate by year-end while moving forward with commitments to scaling AI cloud services and utilizing 100% renewable energy. Investors intrigued by cryptocurrency and AI may find Iris Energy an appealing option.
Iris’ on Its Way to 30 EH/s
Iris Energy is a Bitcoin mining company making substantial strides in developing its data center operations and electrical infrastructure to support the growing demand for AI.
The company has reported significant progress in Bitcoin mining, including expanding its self-mining abilities from 5.6EH/s to 15 EH/s. It remains committed to its original guidance of hitting 20 exahash by the end of next month and 30 exahash by the end of the year.
In addition, the company continues to scale its AI Cloud Services revenue, which is currently being serviced by 816 NVIDIA H100 GPUs. Iris has increased grid-connected power from 760MW to 2,310MW in the past year and plans further expansion. Further, the company successfully transitioned to spot pricing in August 2024 to optimize power costs in real time and evade previous hedging costs and risks.
Iris’ Recent Financial Results
The company recently reported financial performance for fiscal year 2024. Record-breaking revenue of $188.8 million marked a massive jump of 150% year-over-year, driven by Bitcoin mining revenue of $184.1 million sparked by a significant surge in operating hashrate and high Bitcoin prices. Furthermore, AI Cloud Services contributed $3.1 million in revenue, serving multiple customers in the reserved and on-demand market.
However, the net electricity cost increased to $76.0 million from $35.8 million in FY 2023 due to an additional 80MW of capacity commissioned annually. The company’s net loss after income tax decreased to $29.0 million from $171.9 million in 2023. The loss per share of $0.29 was a substantial improvement from the $3.14 loss per share in FY 2023.
As of the quarter’s end, the company reported cash and cash equivalents totaling $404.6 million, with no outstanding debts.
What Is the Price Target for IREN Stock?
IREN stock has been on a volatile ride, sporting a beta of 2.16 while climbing over 73% in the past year. It trades near the middle of its 52-week price range of $2.79 – $15.75 while demonstrating negative price momentum by trading below its 20-day (8.36) and 50-day (9.05) moving averages.
Analysts following the company have been bullish on IREN stock. For instance, Macquarie analyst Paul Golding recently raised the price target from $12 to $13.50 while maintaining an Outperform rating on the shares. He noted that Iris has added about 4.5 EH/s of capacity since its last update and continues to deploy additional miners, along with continuing its AI-fueled business growth.
Based on the recommendations and price targets assigned by eight analysts, Iris Energy is rated a Strong Buy overall. The average price target for IREN stock is $16.25, representing a potential 105.44% upside from current levels.
Bottom Line on IREN
Iris Energy has posted strong revenue growth driven by significant strides in data center expansion and Bitcoin mining. The firm’s on track to realize its ambitious target of a 30 EH/s hashrate by year-end, punctuating its substantial progress in Bitcoin mining, the increase of grid-connected power, and the expansion of its AI cloud services. With an optimistic outlook and impressive financial performance, IREN presents an enticing opportunity for those seeking to invest in the dynamic market of cryptocurrency and AI technologies.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
