Cipher Mining Soars 50% as Bitcoin Sentiment Shifts—Does the Rally Match the Fundamentals?
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Cipher Mining is undervalued by 63.0%. Track this in your watchlist or portfolio, or discover more undervalued stocks.
Approach 2: Cipher Mining Price vs Sales (P/S)
The Price-to-Sales (P/S) ratio is a particularly useful valuation metric for companies like Cipher Mining that are still scaling their operations and may not yet be profitable. Unlike earnings-based multiples, the P/S ratio allows investors to value companies based on their revenue, which is often a more stable metric for fast-growing or early-stage tech and crypto firms.
It is important to understand that what counts as a "normal" or "fair" P/S ratio is influenced by growth expectations, the stability of revenue streams, and the perceived risks in the company's business model. High-growth industries and businesses with robust revenue outlooks often warrant higher P/S ratios, while more mature or riskier firms typically trade below their sector's average.
Cipher Mining currently trades at a P/S ratio of 28.4x, which is higher than the sector average of 5.4x and above its peer average of 23.3x. While these figures make the stock look expensive at first glance, Simply Wall St’s proprietary "Fair Ratio" model seeks to provide a deeper perspective by factoring in Cipher’s earnings growth potential, profit margins, industry trends, market cap, and specific risks unique to the business.
The Fair Ratio for Cipher Mining stands at 7.4x, meaning the stock's P/S is well above what you might expect when accounting for all relevant company and industry-specific factors. This approach is more reliable than a simple peer or industry comparison as it is tailored to Cipher Mining’s unique profile.
Given that Cipher’s current P/S ratio of 28.4x is much higher than the Fair Ratio of 7.4x, the stock appears overvalued by this metric.
Result: OVERVALUED
PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.
Upgrade Your Decision Making: Choose your Cipher Mining Narrative
Earlier, we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a simple, powerful way for investors to tell their own story about a company by linking their perspective on Cipher Mining’s opportunities and risks to their assumptions around future revenue, earnings, margins, and ultimately, fair value.
Rather than relying solely on static ratios or analyst forecasts, Narratives connect the company’s story and outlook directly to a financial forecast, making your investment thesis data-driven and actionable. Narratives are easy to create and follow within the Simply Wall St Community page, which is already used by millions of investors.
They help you decide when to buy, hold, or sell by clearly showing where your Fair Value estimate stands compared to the current market price, and automatically update with every material change, such as new earnings results or breaking news, so you always have the latest view at your fingertips.
For example, one Narrative for Cipher Mining forecasts aggressive revenue growth and a fair value of $11.38, while another more cautious view values the company at just $6.00, illustrating how different investment stories shape different financial outcomes.
Do you think there's more to the story for Cipher Mining? Create your own Narrative to let the Community know!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include CIFR.
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