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Hut 8 (TSE:HUT)
TSX:HUT
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Hut 8
(TSX:HUT)
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Rating:57Neutral
Price Target:
C$78.00
▲(5.42% Upside)
Action:ReiteratedDate:02/26/26
The score is held back primarily by weak cash generation and volatile profitability despite strong revenue growth and only moderate leverage. Technicals are supportive with the stock trading above key moving averages, while valuation (P/E ~30) offers limited margin of safety. Earnings-call tone supports the outlook via scaling plans, River Bend progress, and improved financing, but near-term earnings volatility and execution risk remain material.
Positive Factors
Large Bitcoin reserves
A substantial BTC reserve (~13.7k coins, ~$1.6bn) provides durable liquidity optionality: it can fund capex or cover operating shortfalls without immediate equity issuance, smooth cash needs during miner revenue cycles, and materially strengthens balance sheet resilience over months.
Strategic long-term AI/data center partnerships
The Anthropic/Fluidstack partnership and multi-tranche deployment (initial 245 MW, optional expansion to 2,295 MW) represents a structural shift into hyperscale AI infrastructure with multi-year demand, long-term tenancy rights, and diversification beyond pure crypto mining, improving revenue visibility and asset utilization.
Large expansion and contracted capacity pipeline
A 1,530 MW expansion pipeline and expanded managed services (325 MW contracted with American Bitcoin) more than doubles platform scale potential, driving long-term operating leverage, stronger contractual revenue streams and the ability to capture scale economies in power procurement and equipment deployment over the next several quarters.
Negative Factors
Negative operating and free cash flow
Sustained negative operating and free cash flow is a durable risk for a capex- and power-intensive miner: it increases reliance on asset monetization, digital asset sales, or external financing to fund growth, raising execution and dilution risk while constraining ability to self-fund the expansion pipeline.
Income statement instability and accounting volatility
Negative gross margins and a TTM net loss indicate core profitability challenges; reported earnings are also materially affected by fair-value gains on digital assets (FASB accounting), making operating performance volatile and reducing the predictive value of GAAP profits for long-term cash generation.
Segment margin pressure from cost increases and revenue decline
A steep drop in Power segment revenue alongside a large rise in Compute segment costs compresses margins and highlights execution/scale-up inefficiencies. If higher unit costs persist while legacy contracts lapse, profitability and cash conversion could remain under pressure during growth phases.
Hut 8 (HUT) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$7.22B
Dividend YieldN/A
Average Volume (3M)1.75M
Price to Earnings (P/E)―
Beta (1Y)2.83
Revenue Growth7.46%
EPS Growth-4.30%
CountryCA
Employees222
SectorFinancial
Sector Strength70
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)-3.35
Shares Outstanding110,887,280
10 Day Avg. Volume1,878,836
30 Day Avg. Volume1,750,027
Financial Highlights & Ratios
PEG Ratio0.11
Price to Book (P/B)3.41
Price to Sales (P/S)20.24
P/FCF Ratio-13.36
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$99.03Price Target Upside33.84% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering14
EPS Forecast (FY)-1.3
Revenue Forecast (FY)C$481.12M
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 generates revenue primarily through cryptocurrency mining, where it earns Bitcoin by solving complex mathematical problems and validating transactions on the blockchain. The company operates mining facilities equipped with high-performance hardware, allowing it to produce Bitcoin efficiently. Additionally, Hut 8 has revenue streams from hosting services, where it provides infrastructure for clients looking to mine cryptocurrencies or manage their digital assets. The company may also engage in buying and selling cryptocurrencies, which can contribute to revenue depending on market conditions. Strategic partnerships with energy providers and technology firms may enhance its operational efficiency and profitability.
Hut 8 Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 20, 2026
Earnings Call Sentiment Positive
The call highlighted strong operational momentum: meaningful revenue growth (45% FY), substantial compute segment expansion (+150.7% YoY), gross margin improvement, a validated River Bend execution plan, an 8.5 GW development pipeline, strategic AI partnerships, and improving project financing. Offsetting these positives were a sizable net loss and adjusted EBITDA deterioration driven mainly by a $220M unrealized Bitcoin markdown, declines in power and digital revenues due to contract terminations, higher G&A/stock-based comp as the company scales, and ongoing execution/financing and regulatory risks tied to large projects. Overall, the company presents improving commercial and financing foundations but faces near-term earnings volatility and project execution risk.Q4-2025 Updates
Positive Updates
Revenue Growth and Margin Expansion
Total revenue grew 45% year-over-year to $235.1M while cost of revenue rose 24% to $107.8M, driving gross margin expansion from 47% to 54%. Q4 2025 vs Q4 2024 revenue increased 179% with gross margin expanding from 36% to 60% (a +24 percentage point improvement).
Compute Segment Surge
Compute revenue increased to $202.3M from $80.7M, a +150.7% increase year-over-year, driven by infrastructure upgrades, higher deployed hash rate and a full year of Highrise AI contribution ($7.4M). Compute segment margins expanded from 44% to 61%.
Strategic Transactions, Partnerships and Repositioning
Completed carve-out of legacy Bitcoin mining (American Bitcoin), executed first AI data center transaction (Fluidstack/Anthropic), and announced a strategic partnership with Anthropic. Institutional ownership rose from sub-10% to ~70%, reflecting stronger investor credibility.
River Bend Execution and Large Development Pipeline
River Bend construction tracking to plan with first data hall expected in early Q2 and subsequent halls every ~60 days; 1 GW expansion plan validated by Entergy (power available). Company reports an 8.5 GW development pipeline across various stages.
Financing Progress and Capital Structure Evolution
Shifted from high-CapEx bitcoin mining model to long-duration infrastructure contracts. Secured project financing engagement with JPMorgan and Goldman Sachs with improved terms (targeted financing moved to ~90% LTC at SOFR+240). Management indicates minimal parent-recourse debt once Coatue note converts.
Infrastructure Innovation and Cost Efficiency
Delivered Vega 180 kW direct liquid-to-chip design and reported a development cost benchmark of ~$455,000 per MW from scratch. Co‑development with Vertiv and Jacobs emphasizes value engineering and aims to lower cost per MW and improve repeatability.
Negative Updates
Large Net Loss and Adjusted EBITDA Deterioration
Reported net loss of $248M (versus net income of $331.4M prior year) and adjusted EBITDA loss of $135.4M (versus adjusted EBITDA of $555.7M prior year). Management attributes the swing largely to a $220M primarily unrealized Bitcoin mark-to-market loss in 2025 versus a $509.3M gain in 2024.
Declines in Power and Digital Infrastructure Revenue
Power revenue declined to $23.2M from $56.6M (≈ -59.0% YoY), reflecting termination of the ionic digital agreement in managed services. Digital infrastructure revenue fell to $9.6M from $17.5M (≈ -45.1% YoY), despite improving margins as Vega commercialized.
Rising G&A and Stock-Based Compensation
Total G&A increased to $122.8M from $72.9M (≈ +68.5% YoY). Stock-based compensation rose to $57.8M from $20.8M (≈ +177.9%), while cash SG&A increased from $52M to $65M (+25%), reflecting upscaling of teams and investments ahead of growth.
Commodity Exposure and Balance Sheet Volatility
Significant earnings volatility tied to Bitcoin holdings produced large unrealized losses in 2025. Management plans to move Bitcoin exposure off Hut 8's balance sheet (retain exposure via equity in American Bitcoin), but transition and timing present funding and valuation risk.
Execution and Project Financing Risk
Key initiatives (River Bend and other large campuses) require complex coordination and financing; while committed lenders are engaged, closing, construction, long-lead procurement and OSA negotiations remain execution risks until projects are revenue-generating.
Regulatory and Market Headwinds in Some Regions
Evolving grid/transmission studies and proposed ERCOT rules, plus local stakeholder pushback in some markets, create potential delays or added complexity for expansion (notably noted for ERCOT and general transmission/permitting dynamics).
Company Guidance
Management guided 2026 as a year of execution and scaling, emphasizing conversion of an 8.5 GW development pipeline and delivery of River Bend Phase 1 (330 MW under construction) with the first data hall coming online in early Q2 and subsequent halls every ~60 days (4 data centers per hall); they highlighted FY2025 results—revenue up 45% to $235.1M, cost of revenue $107.8M (+24%), gross margin expansion to 54% (from 47%) and Q4 revenue +179% with Q4 gross margin 60% (vs 36%)—while reporting a net loss of $248M and adjusted EBITDA loss of $135.4M (vs adj. EBITDA $555.7M in 2024, driven by a $220M BTC mark‑to‑market loss vs a $509.3M gain prior). Segment detail: compute revenue $202.3M (from $80.7M) with margins improving to ~61% (from 44%), power revenue $23.2M (from $56.6M), digital infra $9.6M (from $17.5M); balance sheet/capital notes included G&A $122.8M (stock comp $57.8M; cash SG&A ~$65M), $163M deposits for future sites, a capital plan targeting project financing (recently improved to ~90% LTC at SOFR+240 with JPMorgan/Goldman), Vega at 180 kW/rack and $455k per MW, and an expectation that the in‑the‑money Coatue convert will convert this year leaving no parent recourse debt.Hut 8 Financial Statement Overview
Summary
Financials are higher risk: while TTM revenue is up sharply (+97.5%), profitability is inconsistent (negative gross profit and deeply negative net income in TTM versus strong FY2024). Cash flow is a major weakness with negative operating cash flow and meaningfully negative, deteriorating free cash flow. The balance sheet is moderately levered (TTM debt-to-equity ~0.27), but total debt has risen and returns have been inconsistent.Income Statement
Results are highly volatile. TTM (Trailing-Twelve-Months) revenue is up sharply (+97.5%), but gross profit is negative and net income is deeply negative, signaling significant cost pressure and/or non-operating losses. In contrast, FY2024 showed exceptionally strong profitability (high gross profit and solid net income), highlighting a sharp swing in earnings quality and sustainability from period to period.52
Neutral
Balance Sheet
Balance sheet looks reasonably supported by equity with moderate leverage. TTM debt-to-equity is ~0.27 (lower than FY2024 ~0.35), suggesting debt is not excessive relative to capital. However, total debt has risen materially versus prior years, and returns on equity have been inconsistent across periods, which raises risk if profitability remains unstable.70
Positive
Cash Flow
Cash generation is a key weakness. Operating cash flow is negative across the periods shown (including TTM), and free cash flow is meaningfully negative with further deterioration in TTM free cash flow growth. This indicates the business is currently consuming cash rather than producing it, increasing reliance on financing and making results more sensitive to capital market conditions.30
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 328.53M | 671.72M | 81.80M | 150.68M | 173.77M |
| Gross Profit | 35.55M | 585.07M | 21.17M | -24.97M | 88.80M |
| EBITDA | 24.24M | 531.11M | 1.36M | 3.57M | 74.67M |
| Net Income | -316.00M | 331.88M | 16.45M | -242.81M | -40.94M |
Balance Sheet | |||||
| Total Assets | 4.14B | 1.52B | 976.87M | 412.94M | 720.71M |
| Cash, Cash Equivalents and Short-Term Investments | 64.82M | 85.04M | 47.36M | 30.52M | 140.13M |
| Total Debt | 610.82M | 345.65M | 268.75M | 47.42M | 40.69M |
| Total Liabilities | 1.82B | 538.28M | 333.87M | 55.55M | 154.74M |
| Stockholders Equity | 1.95B | 976.67M | 643.00M | 357.39M | 565.97M |
Cash Flow | |||||
| Free Cash Flow | -497.65M | -333.13M | -27.30M | -177.74M | -166.67M |
| Operating Cash Flow | -194.54M | -68.53M | -26.48M | -105.03M | -80.24M |
| Investing Cash Flow | -1.05B | -188.47M | 87.25M | -103.61M | -235.07M |
| Financing Cash Flow | 1.20B | 311.95M | -33.45M | 99.83M | 455.84M |
Hut 8 Technical Analysis
Positive
73.99
Price Trends
75.54
Negative
68.28
Positive
50.56
Positive
Market Momentum
-0.84
Positive
50.08
Neutral
19.95
Positive
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 73.99 is above the 20-day moving average (MA) of 72.88, below the 50-day MA of 75.54, and above the 200-day MA of 50.56, indicating a neutral trend. The MACD of -0.84 indicates Positive momentum. The RSI at 50.08 is Neutral, neither overbought nor oversold. The STOCH value of 19.95 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:HUT.
Hut 8 Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
57 Neutral | C$7.22B | -21.04 | 18.75% | ― | 7.46% | -4.30% | |
46 Neutral | C$1.54B | ― | -17.06% | ― | 51.69% | 28.00% | |
45 Neutral | C$12.92B | -43.24 | -2.77% | ― | ― | -121.84% | |
44 Neutral | C$47.46M | -5.39 | -10.10% | ― | 39.64% | -70.96% | |
44 Neutral | C$17.88M | -12.41 | -13.56% | ― | 40.83% | -123.25% | |
43 Neutral | C$98.78M | -6.21 | 0.60% | ― | -21.21% | -84.82% |
* Financial Sector Average
TSE:HUT
Hut 8
73.99
54.81
285.77%
TSE:NDA
Neptune Digital Assets
0.88
-0.74
-45.68%
TSE:BITF
Bitfarms
3.07
1.46
90.68%
TSE:GLXY
Galaxy Digital
33.20
14.38
76.41%
TSE:DMGI
DMG Blockchain Solutions
0.26
-0.03
-8.93%
TSE:CBIT
Cathedra Bitcoin Inc
0.64
-1.01
-61.21%
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.