Shares of Hut 8 Corp (NASDAQ:HUT) tanked in early trading on Thursday, after the company reported downbeat first-quarter (Q1) results.
The company signed a 15-year, 352 MW (megawatt) lease at its Beacon Point campus. Needham expects it to contribute more heavily toward the back end as the lease ramps into FY28.
The Hut 8 Analyst: Analyst John Todaro reaffirmed a Buy rating and raised the price target from $88 to $128.
The Hut 8 Thesis: The company reported revenues of $71 million. It missed Needham's $77.4 million estimate, due to lower bitcoin prices, Todaro said.
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Excluding bitcoin, Hut 8's adjusted EBITDA came in at $45.1 million. That’s 60% above Needham's $28.2 million estimate, "reflecting better-than-expected cost of revenue across both Power and Compute segments," he added.
The focus is now on the company's post-quarter announcements. There’s a lease for its Corpus Christi site, known as Beacon Point, with a base-term value of $9.8 billion. The IG River Bend bond is worth $3.25 billion, the analyst stated.
Although management did not disclose which company granted the Corpus Christi lease, Todaro said it is a new customer.
The analyst added that the new customer could be among the active hyperscalers, like Meta Platforms Inc (NASDAQ:META), Amazon.com Inc (NASDAQ:AMZN), or Oracle Corp (NYSE:ORCL). The economics of the latest lease are in line with the one signed in December.
With the 352 MW lease signed at the Beacon Point site and the Corpus Christi site scaling to 1 gigawatt in gross capacity, the site represents about 200 MW of gross capacity available for signing in the near term and another 300 MW of power becoming available 24 months from now, the analyst noted.
Price Action
Shares of Hut 8 had declined by 9.10% to $99.03 at the time of publication on Thursday.
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