CLSK Stock To Rise 2x?

CleanSpark (NASDAQ: CLSK) experienced a significant 13% stock surge on June 24, 2025, following the bitcoin miner’s achievement of a 50 EH/s (Exahashes per second) hashrate milestone, a key indicator of computing power within the Bitcoin network. This accomplishment enhances the company’s prospects for earning Bitcoin rewards. With plans to further scale to 60 EH/s, the question of whether CLSK stock presents a compelling buying opportunity arises. Based on an evaluation of its operating performance and financial health across key metrics, CleanSpark appears to be an attractive investment and the potential upside could be as high as 2x. But, if you are looking for an upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception. Separately, see – Should You Buy RKLB Stock At $33?

Valuation Analysis

Examining CleanSpark’s valuation in comparison to the broader market, its price-to-sales (P/S) ratio of 5.2 suggests it is currently more expensive than the S&P 500’s P/S ratio of 3.1. This premium valuation can be attributed to the company’s robust revenue growth in recent years. CleanSpark’s top line has expanded at an impressive average rate of 79.9% over the last three years, significantly outpacing the S&P 500’s 5.5% growth. More recently, its revenues increased by 90.1% from $283 million to $537 million in the past 12 months, and quarterly revenues in the most recent period grew by 62.5% to $182 million from $112 million a year ago, both far exceeding the S&P 500’s comparable growth rates. These strong growth figures support the higher valuation multiple.

Profitability Assessment

While CleanSpark’s reported operating income over the last four quarters was $-93 million, resulting in a negative operating margin of -17.4%, a different perspective on its profitability emerges when accounting for non-cash items such as impairment charges, depreciation and amortization (D&A), and stock-based compensation. Adjusting for these factors reveals a strong adjusted EBITDA margin of 65% in 2024, indicating solid underlying profitability.

Financial Stability

From a financial stability standpoint, CleanSpark’s balance sheet appears robust. Its debt figure of $647 million at the end of the most recent quarter, against a market capitalization of $2.8 billion as of June 24, 2025, translates to a moderate Debt-to-Equity Ratio of 23.1%, which is comparable to the S&P 500’s 19.4% but still within a desirable range for a lower ratio. Furthermore, the company maintains a very strong cash position, with $934 million in cash (including cash equivalents) out of $2.7 billion in total assets, yielding a Cash-to-Assets Ratio of 35.1%.

Market Resilience and Risk Factors

However, CleanSpark’s stock has shown a weaker resilience during market downturns compared to the S&P 500 index. During the Inflation Shock of 2022, CLSK stock plummeted 95.6% from a high of $40.39 on January 7, 2021, to $1.78 on December 19, 2022, while the S&P 500 experienced a peak-to-trough decline of 25.4%. The stock has not yet fully recovered to its pre-crisis high, with its highest point since then being $23.40 on March 25, 2024, and currently trading around $10.00. Similarly, during the Covid Pandemic in 2020, CLSK stock fell 80.0% from $5.25 on January 23, 2020, to $1.05 on April 2, 2020, in contrast to the S&P 500’s 33.9% decline. Notably, the stock did fully recover to its pre-crisis peak by July 22, 2020, after the Covid-related dip.
The company could face more risks beyond broader macroeconomic concerns. Bitcoin price, for one, is inherently volatile, and any significant pullback in Bitcoin’s value would not bode well for CLSK either, given its strong correlation to the cryptocurrency’s performance.

Investment Verdict

In conclusion, CleanSpark demonstrates extremely strong growth and adjusted profitability, coupled with very strong financial stability. While its downturn resilience has been notably weak, the overall assessment of the stock remains strong. When considering the company’s substantial growth and impressive adjusted profitability, its current valuation appears inexpensive. Analyst price estimates, with an average of $20, further suggest a potential 2x upside for CLSK stock from its current trading level.

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