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Canaan (CAN)
NASDAQ:CAN
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Canaan
(NASDAQ:CAN)
Rating:45Neutral
Price Target:
$0.50
▼( -26.47% Downside)
Positive Factors
Financial Performance
Canaan Inc. reported its highest quarterly revenue in five quarters, with a year-over-year rise of 120.9%.
Growth Potential
Advancements in bitcoin equipment manufacturing, combined with the expansion of its self-mining activities, have positioned Canaan Inc. favorably for future growth.
Valuation
Canaan Inc. trades at just 0.3x FY25E EV/revenue, which is significantly lower than its closest competitors, indicating potential undervaluation.
Negative Factors
Guidance Withdrawal
Management withdraws FY25 guidance amid tariff uncertainty.
Inventory Pricing Pressure
Selling through the Avalon A14 inventory pressured pricing to the $8.58/Th level in 3Q24, by our calculations.
Trade Tariffs
The imposition of tariffs by the U.S. government impacted CAN’s customer order flow and self-mining deployments, with demand for its bitcoin mining rigs from North American customers remaining under pressure.
Canaan (CAN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$234.58M
Dividend YieldN/A
Average Volume (3M)23.37M
Price to Earnings (P/E)―
Beta (1Y)1.58
Revenue Growth65.68%
EPS Growth50.28%
CountryUS
Employees463
SectorTechnology
Sector Strength76
IndustryComputer Hardware
Share Statistics
EPS (TTM)-0.27
Shares Outstanding399,488,600
10 Day Avg. Volume37,969,764
30 Day Avg. Volume23,370,241
Financial Highlights & Ratios
PEG Ratio-0.09
Price to Book (P/B)0.80
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$3.88Price Target Upside470.59% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Canaan Business Overview & Revenue Model
Company DescriptionCanaan Inc. is a leading technology company that specializes in providing high-performance computing solutions. The company is primarily known for its development and production of advanced blockchain servers and ASIC microprocessor solutions, which are integral to the cryptocurrency mining sector. In addition to its core focus on cryptocurrency mining hardware, Canaan is also involved in the development of artificial intelligence (AI) applications and services.
How the Company Makes MoneyCanaan Inc. generates revenue primarily through the sale of its proprietary blockchain servers and ASIC microprocessors, which are used by customers to mine cryptocurrencies such as Bitcoin. The company's revenue model is heavily reliant on the demand for cryptocurrency mining equipment, which fluctuates based on market conditions and cryptocurrency prices. Canaan also explores additional revenue streams through its ventures into AI development, though this segment currently represents a smaller portion of its overall revenue. The company's earnings are influenced by its ability to maintain competitive pricing, technological advancements in its products, and strategic partnerships within the tech and crypto industries.
Canaan Financial Statement Overview
Summary
Canaan's financial performance is under significant pressure with declining revenues and substantial losses. The income statement reveals negative margins and declining sales, indicating operational and market challenges. The balance sheet shows low debt but declining equity and assets, while the cash flow statement highlights liquidity issues with negative free cash flow.Income Statement
Canaan's income statement reveals significant volatility and declining performance. The gross profit margin is negative, indicating costs exceed revenue. The net profit margin has deteriorated from 10.73% in 2022 to -195.84% in 2023, highlighting substantial losses. Revenue has dropped significantly by 67.78% from 2022 to 2023, suggesting challenges in maintaining sales momentum. EBIT and EBITDA margins are also negative, reflecting operational inefficiencies.25
Negative
Balance Sheet
The balance sheet shows a decrease in total assets and stockholders' equity, indicating potential financial instability. The debt-to-equity ratio remains low at 0.004, suggesting minimal reliance on debt. However, the return on equity has plummeted from 11.50% in 2022 to -118.89% in 2023, due to the negative net income. The equity ratio improved slightly to 70.58%, indicating a relatively strong equity position compared to assets.45
Neutral
Cash Flow
The cash flow statement highlights negative free cash flow, which improved slightly from 2022 but remains concerning. The operating cash flow to net income ratio is negative, indicating cash outflows exceed earnings. The free cash flow to net income ratio is also negative, suggesting poor cash generation relative to losses. These factors indicate cash flow challenges and potential liquidity issues.30
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 285.03M | 211.48M | 656.32M | 771.14M | 68.58M | 1.42B | Gross Profit |
| -179.74M | -240.78M | 231.98M | 440.83M | 5.79M | -516.00M | EBIT |
| -328.73M | -410.88M | 43.25M | 282.38M | -38.89M | -1.05B | EBITDA |
| -245.21M | -330.11M | 84.51M | 285.16M | -34.11M | -1.02B | Net Income Common Stockholders |
| -380.65M | -414.15M | 70.40M | 308.44M | -32.95M | -1.03B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 258.94M | 96.15M | 105.65M | 421.67M | 69.50M | 527.61M | Total Assets |
| 1.40B | 493.30M | 690.00M | 884.74M | 158.76M | 991.43M | Total Debt |
| 1.05B | 1.43M | 1.45M | 2.56M | 5.83M | 113.30M | Net Debt |
| 790.07M | -94.73M | -100.85M | -419.11M | -54.11M | -403.31M | Total Liabilities |
| 1.16B | 145.11M | 77.86M | 341.44M | 92.50M | 298.63M | Stockholders Equity |
| 240.98M | 348.19M | 612.13M | 543.31M | 66.26M | 692.79M |
| Cash Flow | Free Cash Flow | ||||
| 0.00 | -126.93M | -201.82M | 196.23M | 6.15M | -288.44M | Operating Cash Flow |
| 0.00 | -123.62M | -183.94M | 201.86M | 6.48M | -280.06M | Investing Cash Flow |
| 0.00 | 39.63M | ― | 846.22K | ― | -16.33M | Financing Cash Flow |
| 0.00 | 90.00M | -56.59M | 138.93M | -17.15M | 277.95M |
Canaan Technical Analysis
Negative
0.68
Price Trends
0.81
Negative
1.29
Negative
1.34
Negative
Market Momentum
-0.02
Negative
44.09
Neutral
25.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAN, the sentiment is Negative. The current price of 0.68 is below the 20-day moving average (MA) of 0.74, below the 50-day MA of 0.81, and below the 200-day MA of 1.34, indicating a bearish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 44.09 is Neutral, neither overbought nor oversold. The STOCH value of 25.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CAN.
Canaan Risk Analysis
Canaan disclosed 91 risk factors in its most recent earnings report. Canaan reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 2 New Risks
1.
If we issue additional equity securities in the future, you may suffer dilution, and trading price of our ADSs may decline. Q4, 2023
2.
We have a limited history in the operation of mining facilities. Q4, 2023
Canaan Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
60 Neutral | $11.56B | 10.24 | -7.04% | 2.94% | 7.46% | -10.54% | |
47 Neutral | $345.24M | ― | -10.27% | ― | ― | ― | |
45 Neutral | $234.58M | ― | -90.43% | ― | 65.68% | 50.28% | |
41 Neutral | $83.93M | ― | 33.98% | ― | -17.08% | -223.70% | |
41 Neutral | $25.00M | ― | -7.51% | ― | 20.88% | ― | |
37 Underperform | $235.99M | ― | -99.85% | ― | -8.09% | 22.06% |
* Technology Sector Average
Performance Comparison
CAN
Canaan
0.70
-0.32
-31.37%
DDD
3D Systems
1.62
-1.86
-53.45%
QMCO
Quantum
12.88
3.73
40.77%
NNDM
Nano Dimension
1.61
-0.95
-37.11%
EBON
Ebang International Holdings
3.95
-4.55
-53.53%
Canaan Earnings Call Summary
Earnings Call Date:May 20, 2025
(Q1-2025)
| % Change Since: -17.07%|
Next Earnings Date:Aug 14, 2025
Earnings Call Sentiment Neutral
The earnings call reflected strong revenue growth and successful product launches, particularly in non-US markets. However, significant challenges were noted due to tariff impacts and bitcoin price volatility, leading to strategic caution and withdrawal of full-year guidance.Q1-2025 Updates
Positive Updates
Record Revenue Growth
Total revenues for Q1 2025 reached $82.8 million, surpassing the previous guidance of $75 million, marking a 136% year-over-year increase.
Strong Performance in Mining Operations
The self-mining business delivered 259 bitcoins, up 39% quarter-over-quarter, with mining revenue reaching over $24 million, a 59% sequential increase.
Successful Launch and Sales of A15 Series
The A15 series contributed significantly to sales, achieving 5.5 exahash per second in total computing power sold, up 62.6% year-over-year.
Negative Updates
Impact of Tariffs on US Market
US tariffs on imports, including a 10% universal tariff, have led to higher mining costs and decreased demand for mining machines in the US.
Volatility in Bitcoin Prices
Bitcoin prices fluctuated significantly, dropping from $104,000 to $76,000, before rebounding to around $85,000, affecting miners' profit margins.
Withdrawal of Full-Year Revenue Guidance
Due to ongoing global political and economic volatility, the company has withdrawn its previously issued full-year revenue guidance.
Company Guidance
During the first quarter of 2025, Canaan Inc. faced significant challenges due to macroeconomic factors, including rising tariffs and volatile bitcoin prices. Despite these hurdles, the company reported revenues of $82.8 million, surpassing their guidance of $75 million and marking a 136% year-over-year increase. Their self-mining business produced 259 bitcoins, contributing to a mining revenue of over $24 million, a 59% sequential increase, supported by a competitive electricity cost of $4.2 per kilowatt hour. The average selling price per terahash rose by 30% sequentially to $10.5, driven by the high performance A15 series, which accounted for $45 million of the mining machine sales and 3.9 million terahash per second in computing power sold. However, due to the ongoing tariff uncertainty, Canaan withdrew its full-year revenue guidance and hash rate deployment targets, projecting a cautious revenue of $100 million for Q2 2025.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.