BTIG Reiterates Buy Rating on CleanSpark Inc. (CLSK)

BTIG analyst Gregory Lewis reiterated a Buy rating and $26.00 price target on CleanSpark Inc. (NASDAQ: CLSK).

The analyst commented: 'This morning (BMO), CLSK announced a 20-year HPC colocation contract with a global technology investment-grade tenant at its Sandersville site in Georgia, giving the company its first of what should be many HPC/AI colocation contracts. The lease is expected to generate ~$6.6B of revenue over the initial 20-year period (contract includes two five-year options, which if exercised bring total lease revenue to ~$11.6B). The contract is for 175MW of IT load, which implies a 1.4x PUE (slightly lower than some of the PUEs in Texas of 1.45-1.50x) and points to ~$1.9M/MW/year, which is a slight premium to recent HPC lease contracts that have priced in the $1.7-$1.8M range. We note premium locations (think closer to cities) look to be garnering a premium to other locations that are more remote, which should bode well for CLSK's other assets in the Atlanta area (~370MW). Another key to the deal is that it is structured as a triple-net lease (we have now seen a few companies able to secure triple-net leases which is where the market is given the shortage of prompt power) which points to a NOI margin of ~100%, and an unlevered return of ~11%-12%. Given the investment-grade counterparty and 20-year deal term, we expect this project to be attractively financed (~90% loan-to-cost with a ~6% interest rate), which should further support deal economics."

For an analyst ratings summary and ratings history on CleanSpark Inc. click here. For more ratings news on CleanSpark Inc. click here.

Shares of CleanSpark Inc. closed at $12.36 yesterday.

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