This analyst just raised his price target on TeraWulf

Roth Capital Markets analyst Darren Aftahi raised his target price on TeraWulf (TeraWulf Stock Quote, Chart, News, Analysts, Financials NASDAQ:WULF) US$21.50 from US$14.00 in a Sept. 25 update, citing a revised sum-of-the-parts valuation to reflect its announced high-performance computing power pipeline.

He reiterated a “Buy” rating on the stock.

“With evolving HPC/AI power demand, we are updating our valuation methodology for WULF, who remains a leader in the industry with ~422 megawatts of CITL signed leases at its Lake Mariner site with two different customers (including a backstop by Google),” he said. “We take a portfolio approach to WULF’s current/future announced power and construct an NPV analysis of the two signed leases and layer on its potential incremental power available for HPC deals, which are then heavily discounted to arrive at our updated price target of $21.50.”

Aftahi said his model now values existing colocation agreements with Core42 and Fluidstack/Google, removes 250MW of Lake Mariner Bitcoin-dedicated power, and layers in longer-term interconnect expansion of 250MW plus the Cayuga site’s 400MW capacity.

By applying baseline economics to the 708MW of additional potential power and discounting for financing and execution risk, Aftahi estimates an adjusted market capitalization of about US$16.4-billion, or US$21.50 per share. That implies an enterprise value of roughly US$28-billion, about 17 times annualized Adjusted EBITDA from signed and prospective HPC agreements.

He forecasts TeraWulf will generate Adjusted EBITDA of US$26.7-million on revenue of US$194-million in fiscal 2025, rising to US$166.5-million on US$372.4-million in 2026.

Easton, Md.-based Beowulf Electricity & Data, TeraWulf’s parent, develops and operates large-scale energy and digital infrastructure projects across North America. TeraWulf’s Lake Mariner site in New York is powered primarily by hydro and nuclear energy, positioning the company as one of the sector’s more eco-friendly operators.

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