Is CleanSpark (CLSK) Pricing Reflect Recent Share Weakness And Bitcoin Mining Sector Headlines
Approach 2: CleanSpark Price vs Sales
The preferred multiple here is the P/S ratio, which can be useful for companies where revenue is a clearer anchor than profits, especially if earnings are volatile or negative. It lets you see how much investors are currently paying for each dollar of sales.
In general, higher growth expectations and lower perceived risk tend to support a higher "normal" or "fair" P/S ratio. Slower expected growth or higher risk usually point to a lower one. So context around the business and its industry really matters.
CleanSpark currently trades on a P/S ratio of 3.21x. That sits a little below the Software industry average of 3.60x and well below the peer group average of 24.10x. Simply Wall St's Fair Ratio for CleanSpark is 3.11x, which is its proprietary estimate of what the P/S could be given factors such as growth profile, industry, profit margin, market cap and key risk indicators.
This Fair Ratio aims to be more tailored than a simple comparison with peers or the broad industry, because it adjusts for company specific traits instead of assuming all software names deserve the same multiple. With the current P/S at 3.21x versus a Fair Ratio of 3.11x, the gap is small, suggesting the valuation is close to what the model would expect.
Result: ABOUT RIGHT
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Upgrade Your Decision Making: Choose your CleanSpark Narrative
Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St you can use Narratives, where you set out your story for a company like CleanSpark, link that story to specific forecasts for revenue, earnings and margins, and then see a Fair Value that updates automatically when new information such as news or earnings arrives. This makes it easy to compare that Fair Value to the current price and decide what action, if any, makes sense for you, whether you lean closer to a very optimistic view that supports a Fair Value of US$30.00 or you are more cautious and prefer something nearer US$14.69, both of which you can explore and customise within the Community page alongside other investors’ views.
Do you think there's more to the story for CleanSpark? Head over to our Community to see what others are saying!
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 CLSK.
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