Cleanspark (NASDAQ:CLSK) stock experienced a significant 17% surge on Tuesday, April 22nd. This upward movement followed Bitcoin’s own substantial rally to the $93,500 mark. Investor optimism, potentially fueled by expectations of a de-escalation in the trade war with China, likely contributed to this increase. The broader market also exhibited strong positive momentum, with both the S&P 500 and NASDAQ closing over 2.5% higher yesterday. This positive sentiment extended beyond CLSK, as other Bitcoin mining companies, including Riot Platforms and MARA Holdings, also saw their stock prices rise.
Following this recent climb, a key question emerges: is CLSK still a worthwhile investment? Our analysis suggests it is. While acknowledging that CLSK stock isn’t inexpensive and certain concerns exist, our conclusion stems from a comparative assessment of its current valuation against its recent operating performance and overall financial health, both present and historical. Our evaluation of Cleanspark across crucial metrics—Growth, Profitability, Financial Stability, and Downturn Resilience—indicates a moderate operating performance and financial condition, as elaborated below.
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How Does Cleanspark’s Valuation Look vs. The S&P 500?
Going by what you pay per dollar of sales or profit, CLSK stock looks slightly expensive compared to the broader market.
- Cleanspark has a price-to-sales (P/S) ratio of 4.5 vs. a figure of 2.8 for the S&P 500
- And, it has a price-to-earnings (P/E) ratio of 28.3 vs. the benchmark’s 24.5
How Have Cleanspark’s Revenues Grown Over Recent Years?
Cleanspark’s Revenues have grown considerably over recent years.
- Cleanspark has seen its top line grow at an average rate of 85.2% over the last 3 years (vs. increase of 6.2% for S&P 500)
- Its revenues have grown 119.0% from $213 Mil to $467 Mil in the last 12 months (vs. growth of 5.3% for S&P 500)
- Also, its quarterly revenues grew 120.0% to $162 Mil in the most recent quarter from $74 Mil a year ago (vs. 4.9% improvement for S&P 500)
How Profitable Is Cleanspark?
Cleanspark’s profit margins are much worse than most companies in the Trefis coverage universe.
- Cleanspark’s Operating Income over the last four quarters was $-61 Mil, which represents a very poor Operating Margin of -13.1% (vs. 13.1% for S&P 500)
- In contrast, the company’s underlying profitability, as reflected in its adjusted EBITDA margin, was very strong at 65% for fiscal year 2024.
- CLSK Operating Cash Flow (OCF) over this period was $-305 Mil, pointing to a very poor OCF Margin of -65.3% (vs. 15.7% for S&P 500)
- For the last four-quarter period, CLSK Net Income was $75 Mil – indicating a moderate Net Income Margin of 16.1% (vs. 11.3% for S&P 500)
Does Cleanspark Look Financially Stable?
Cleanspark’s balance sheet looks strong.
- Cleanspark’s Debt figure was $649 Mil at the end of the most recent quarter, while its market capitalization is $2.5 Bil (as of 4/22/2025). This implies a moderate Debt-to-Equity Ratio of 30.5% (vs. 21.5% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
- Cash (including cash equivalents) makes up $1.2 Bil of the $2.8 Bil in Total Assets for Cleanspark. This yields a very strong Cash-to-Assets Ratio of 43.4% (vs. 15.0% for S&P 500)
How Resilient Is CLSK Stock During A Downturn?
CLSK stock has fared worse than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.
Inflation Shock (2022)
- CLSK stock fell 95.6% from a high of $40.39 on 7 January 2021 to $1.78 on 19 December 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $23.40 on 25 March 2024 and currently trades at around $9
Covid Pandemic (2020)
- CLSK stock fell 79.1% from a high of $5.02 on 4 February 2020 to $1.05 on 2 April 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
- The stock fully recovered to its pre-Crisis peak by 22 July 2020
Putting All The Pieces Together: What It Means For CLSK Stock
In summary, Cleanspark’s performance across the parameters detailed above are as follows:
- Growth: Extremely Strong
- Profitability: Very Weak
- Financial Stability: Very Strong
- Downturn Resilience: Very Weak
- Overall: Neutral
Cleanspark presents a mixed picture based on the parameters we’ve examined. While its valuation appears slightly expensive compared to the broader market, its current price-to-sales ratio of 4.5x trailing revenues is somewhat lower than its four-year average of 4.9x. Furthermore, the company’s future performance is closely tied to the trajectory of Bitcoin.
Although Cleanspark currently exhibits a negative operating margin, a different perspective emerges when we adjust for non-cash items such as impairment charges, depreciation and amortization (D&A), and stock-based compensation. This adjustment reveals a robust adjusted EBITDA margin of 65% in 2024, indicating underlying profitability.
Considering these factors, we believe CLSK stock represents a compelling buying opportunity at its current price of $9. This view is further supported by the average analyst price target of $19, which suggests a significant potential upside of 2x, implying the stock is currently undervalued.
While it looks like there is upside to CLSK stock, the Trefis Reinforced Value (RV) Portfolio, has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.
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