Description

Earnings out + the stock -20%... What to think of it? Is CLSK the best bitcoin miner stock? Today we dig deep into CleanSpark's Q3 earnings, balance sheet, income statement, guidance and valuation. By the end of this visual & cultural experience, you might get a better idea of why I think that this is one of the best stocks to buy in September 2021... By the end, you might even feel a bit of je ne sais quoi if you know what I mean. 

CleanSpark is still on track to mine 10 bitcoin per day in September. That puts them at approximately 41M in revenue just for next quarter, assuming a $45k bitcoin. Considering that it only costs them something like 6k to mine each bitcoin, that represents an attractive ROI. 

If we look further, CleanSpark is still on track to mine somewhere between 16 and 18 bitcoin per day by December 2021 if we keep the hash rates constant. That's $272M of annual revenue just for their bitcoin mining segment in 2022. In 2022, they will also likely bring in $50M of software revenues, bringing total annual revenues to north of $320M. CLSK currently has a $380M mkt cap. What else do I have to say at this point.

As you may recall CLSK had over 9 figures in cash alone last quarter. This figure is now down to 22M, why? They have been putting down deposits on bitcoin miners. More specifically, on their balance sheet, they have $188M in mining equipment and deposits for mining equipment. This represents an accretive reinvestment in the company, so there’s no cause for concern there.

• Their daily production of bitcoin is currently at 6.7 bitcoin per day. This represents 3 times more than the average during the quarter, and represents a 97.8M annualized revenue run rate with a 40k bitcoin. As you may recall, their current market cap is $380M, so just with today’s annualized production, we get a 4 price to sales for a high growth company. 
• With regards to one time charges. The new crypto regulations in the US force them to record losses even if they are unrealized  (they are still holding a lot of Bitcoin on their balance sheet). This is not a tangible loss in the sense that it will not impact the company itself, it will just make their results not look as good as they should be. This is just details in the accounting.

All things considered, if we were to take into consideration one time charges and the new accounting rules which have no actual incidence on the company’s fundamentals whatsoever, this was a good quarter in my opinion and my long-term thesis remains intact and strong. I’m not in this investment for 2-3 months. I’m in it for years and I believe that a $100 CLSK stock is very realistic. Of course, this comes with a lot of risk. But the upside from here could be 20X+ for my calls, if my thesis plays out. However, this is only my take on the situation and I could be wrong. This is not financial advice by any means. Your investment decisions are your choice