CleanSpark CLSK Shares Slide After Q3 Revenue Miss, Cantor Fitzgerald Lowers Price Target

After the market close on Friday, Bitcoin BTC/USD mining company CleanSpark reported third-quarter revenue of $104.11 million, missing analyst estimates of $110.88 million.

Bitcoin (BTC) mining company CleanSpark Inc (NASDAQ:CLSK) reported a third-quarter revenue that fell short of Wall Street expectations. However, the adjusted loss was narrower than anticipated.

What Happened: CleanSpark reported an adjusted loss of 1 cent per share, which was narrower than the 4 cents loss per share anticipated by analysts.

The company's total revenue for the quarter was $104.11 million, which also fell short of the analyst estimate of $110.88 million.

However, the total revenue was up 129% year-over-year. CleanSpark attributed the increase to a 24% rise in hashrate during the quarter, which brought its hashrate above 22 EH/s.

"We have made a strategic decision to best position the company to thrive now and into the future, recognizing the need to maximize efficiency of our miners and operations," said Zach Bradford, CleanSpark CEO.

"Specifically, we determined to replace a substantial portion of our fleet before the miners reached the end of their originally expected life cycle."

According to Bradford, the decision led to a non-cash expense that impacted the company's reported operating results for the quarter. However, the company believes it is the most prudent step for its long-term success.

CleanSpark said it acquired a $50 million revolving line of credit from Coinbase Global Inc (NASDAQ:COIN) during the quarter to help the company continue to take advantage of opportunities in the marketplace.

CleanSpark ended the quarter with $129.2 million in cash and $413 million in Bitcoin. The company had working capital of $531.9 million and $11 million in debt as of June 30.

Analyst Call: Following the print, Cantor Fitzgerald analyst Brett Knoblauch maintained CleanSpark with an Overweight rating and lowered the price target from $28 to $23.

Knoblauch said the company's results were mixed with revenue that missed expectations but an adjusted loss that was better than anticipated.

"The company highlighted the decision to replace a 'substantial' portion of its fleet before the miners reached the end of their originally expected life cycle, which resulted in a non-cash expense," the analyst added.

"We believe this decision demonstrates the company's focus on maximizing efficiency and setting itself up for long-term success."

According to the analyst, CleanSpark's fleet replacement strategy and the company's belief that it is the most efficient large-scale publicly traded Bitcoin miner based on third-party data are key factors driving the bullish rating.

CLSK Price Action: CleanSpark shares were down 3.93% at $11 at the time of publication, according to Benzinga Pro.

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