Hut 8 (HUT) AI Stock Analysis

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Hut 8

(TSX:HUT)

Rating:54Neutral

Price Target:

C$29.00

▲(1.26%Upside)

Hut 8's overall score reflects financial struggles, particularly in profitability and cash flow management, which are the most significant factors. Technical analysis shows bullish momentum, providing some optimism. However, valuation concerns and mixed signals from the earnings call suggest cautious outlook.

Positive Factors

Market Position

HUT is well-positioned to capitalize on global demand trends for AI infrastructure, leveraging a significant exclusive pipeline and deliverability.

Operational Efficiency

HUT's bitcoin mining hashrate increased to 9.3 EH/s from 5.5 EH/s due to new equipment purchases and installations, enhancing operational capacity.

Strategic Growth

HUT's transformation into a power-first digital infrastructure platform with a focus on Bitcoin hosting and HPC colocation provides long-term growth visibility.

Negative Factors

Contractual Challenges

Revenue was negatively impacted by the termination of an agreement with Ionic and delays in moving new bitcoin mining equipment through customs.

Financial Performance

1Q25 results were light with revenue coming in below estimates and consensus due to the roll-off of old contracts and equipment.

Project Execution

HPC progress remains limited, with the main customer considering an alternative site for a significant project in River Bend, LA.

Hut 8 (HUT) vs. iShares MSCI Canada ETF (EWC)

Market Cap

C$2.98B

Dividend YieldN/A

Average Volume (3M)1.44M

Price to Earnings (P/E)3.8

Beta (1Y)2.29

Revenue Growth15.44%

EPS Growth-134.04%

CountryCA

Employees222

SectorFinancial

Sector Strength81

IndustryFinancial - Capital Markets

Share Statistics

EPS (TTM)-1.81

Shares Outstanding104,220,085

10 Day Avg. Volume1,502,492

30 Day Avg. Volume1,439,897

Financial Highlights & Ratios

PEG Ratio-2.57

Price to Book (P/B)11.56

Price to Sales (P/S)0.00

P/FCF Ratio-23.24

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$32.28

Price Target Upside12.71% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering12

Hut 8 Business Overview & Revenue Model

Company DescriptionHut 8 Mining Corp. operates as a cryptocurrency mining company in North America. The company engages in industrial scale bitcoin mining operations. It also owns and operates 38 BlockBoxes in Drumheller, Alberta; and 51 BlockBoxes in Medicine Hat, Alberta. Hut 8 Mining Corp. was incorporated in 2011 and is headquartered in Toronto, Canada.

How the Company Makes MoneyHut 8 makes money primarily through the mining of cryptocurrencies, such as Bitcoin. The company generates revenue by solving complex mathematical problems that secure the Bitcoin network and, in return, earns block rewards and transaction fees in the form of newly minted Bitcoin. These mined Bitcoins can then be held as an asset or sold on the open market to generate cash flow. Additionally, Hut 8 may engage in strategic partnerships and investments that complement its mining activities, such as collaborating with technology providers to enhance mining efficiency or exploring opportunities in blockchain and digital asset innovation. The company's revenue is directly impacted by cryptocurrency market prices, mining difficulty, and operational efficiency.

Hut 8 Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 64.13%|

Next Earnings Date:Aug 19, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed outlook. On one hand, Hut 8 demonstrated strategic growth plans with the expansion of its Power origination pipeline and successful fleet upgrades, contributing to potential future gains. The launch of American Bitcoin is positioned to strategically navigate the Bitcoin mining sector. However, the call also highlighted significant immediate financial setbacks, including a substantial revenue decline, net loss, and increased operating costs. While the company's strategic moves may yield future benefits, the current financial performance reflects notable challenges.

Q1-2025 Updates

Positive Updates

Power Origination Pipeline

As of March 31, 2025, Hut 8's Power origination pipeline spanned approximately 10,800 megawatts with approximately 2,600 megawatts under exclusivity, indicating a strong position for future growth.

Fleet Upgrade and Efficiency

Completed a fleet upgrade, resulting in a 79% increase in deployed hash rates and a 37% improvement in fleet efficiency quarter-over-quarter, enhancing mining economics.

Strong Balance Sheet

Hut 8 ended the quarter with 10,264 Bitcoin held in reserve, representing $847.2 million in market value, indicating solid financial health.

American Bitcoin Launch

The launch of American Bitcoin as a dedicated entity to operate Bitcoin mining operations, aiming to accumulate Bitcoin at scale with exceptional speed and efficiency.

Negative Updates

Revenue Decline

Revenue for the quarter was $21.8 million, down from $51.7 million in the prior year, primarily due to planned downtime and increased network difficulty post-Bitcoin halving.

Net Loss and EBITDA

Reported a net loss of $134.3 million for the quarter versus net income of $250.7 million in the prior year and adjusted EBITDA of negative $117.7 million, impacted by non-cash losses and external economic factors.

Increased Energy Costs

Energy costs per megawatt hour rose to $51.71 from $40.06 in the prior year due to fixed transmission and distribution charges, affecting operating costs.

Company Guidance

During the first quarter of 2025, Hut 8 focused on strategic investments to advance its evolution as an integrated energy infrastructure platform. The company reported a revenue of $21.8 million, a decline from $51.7 million in the previous year, mainly due to planned downtime for fleet upgrades and the April 2024 Bitcoin halving. This resulted in a net loss of $134.3 million compared to a net income of $250.7 million the prior year. Adjusted EBITDA was negative $117.7 million, down from $297 million. The company's energy costs per megawatt hour rose from $40.06 to $51.71, influenced by fixed charges amidst reduced consumption. Despite these challenges, Hut 8 ended the quarter with 10,264 Bitcoin, valued at $847.2 million. The period marked the launch of American Bitcoin, intended to streamline capital allocation and enhance growth in the Power and Digital Infrastructure segments.

Hut 8 Financial Statement Overview

Summary

Hut 8's financial performance faces significant challenges, with a negative income statement score and a concerning cash flow score due to cash burn issues and inefficiencies. Despite a moderate balance sheet, the company's overall financial stability is undermined by profitability and cash management issues.

Income Statement

Negative

Hut 8's income statement shows significant challenges with profitability and revenue stability. The TTM data indicates a negative gross profit margin and a substantial net loss, highlighting operational inefficiencies. EBIT and EBITDA margins are skewed by high depreciation and amortization costs. Revenue growth has been inconsistent, reflecting volatility in financial performance.

Balance Sheet

Neutral

The balance sheet reflects a moderate financial structure with reasonable equity levels. The debt-to-equity ratio is manageable, suggesting a balanced approach to leveraging. However, the equity ratio indicates some room for improvement in asset utilization. While stockholders' equity is substantial, the overall asset base has seen fluctuations, which may impact financial stability.

Cash Flow

Negative

Cash flow analysis reveals significant concerns, primarily due to negative operating and free cash flows, indicating cash burn issues. The operating cash flow to net income ratio is negative, suggesting inefficiencies in cash generation from core operations. The negative free cash flow growth rate further emphasizes the need for improved cash management strategies.

Breakdown	TTM	Dec 2024	Dec 2023	Jun 2023	Dec 2019	Dec 2018
Income Statement
Total Revenue	45.35M	671.72M	81.80M	150.68M	81.99M	49.44M
Gross Profit	-64.08M	585.07M	21.17M	-24.97M	2.13M	-23.48M
EBITDA	168.75M	531.11M	1.36M	3.57M	30.40M	-2.76M
Net Income	-79.35M	331.88M	16.45M	-242.81M	2.13M	-136.77M
Balance Sheet
Total Assets	1.57B	1.52B	976.87M	412.94M	71.24M	82.90M
Cash, Cash Equivalents and Short-Term Investments	108.38M	85.04M	47.36M	30.52M	2.95M	3.56M
Total Debt	354.86M	345.65M	268.75M	47.42M	26.04M	32.37M
Total Liabilities	584.19M	538.28M	333.87M	55.55M	28.54M	50.24M
Stockholders Equity	959.99M	976.67M	643.00M	357.39M	42.70M	32.66M
Cash Flow
Free Cash Flow	-398.94M	-333.13M	-27.30M	-177.74M	5.27M	-91.14M
Operating Cash Flow	-82.17M	-68.53M	-26.48M	-105.03M	14.51M	-6.77M
Investing Cash Flow	-321.54M	-188.47M	87.25M	-103.61M	-9.73M	-90.16M
Financing Cash Flow	502.03M	311.95M	-33.45M	99.83M	-5.39M	77.24M

Hut 8 Technical Analysis

Technical Analysis Sentiment

Positive

Last Price28.64

Price Trends

50DMA

21.96

Positive

100DMA

21.11

Positive

200DMA

24.96

Positive

Market Momentum

MACD

1.00

Negative

RSI

67.19

Neutral

STOCH

83.53

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HUT, the sentiment is Positive. The current price of 28.64 is above the 20-day moving average (MA) of 24.34, above the 50-day MA of 21.96, and above the 200-day MA of 24.96, indicating a bullish trend. The MACD of 1.00 indicates Negative momentum. The RSI at 67.19 is Neutral, neither overbought nor oversold. The STOCH value of 83.53 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:HUT.

Hut 8 Peers Comparison

Overall Rating

UnderperformOutperform

Sector (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	58 Neutral	$12.53B	5.19	-2.71%	5.24%	5.88%	-56.03%
NDA	56 Neutral	C$180.47M	54.62	5.61%	―	-9.36%	―
HUT	54 Neutral	C$2.98B	3.76	-6.53%	―	15.44%	-134.04%
HIVE		$455.00M	―	-15.83%	―	―	―
BBKCF		$29.12M	―	-110.80%	―	―	―
BITF		$462.52M	―	-16.30%	―	―	―
GLXY		$8.29B	―	-23.34%	―	―	―

* Financial Sector Average

Performance Comparison

TSE:HUT

Hut 8

28.64

6.20

27.63%

HIVE

HIVE Digital Technologies

2.25

-1.09

-32.63%

TSE:NDA

Neptune Digital Assets

1.42

1.16

446.15%

BBKCF

BIGG Digital Assets

0.09

-0.02

-18.18%

BITF

Bitfarms

1.01

-1.66

-62.17%

GLXY

Galaxy Digital

22.22

11.01

98.22%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 03, 2025