TeraWulf (US:WULF) ZACKSยท2025-10-23 19:01Core Insights - TeraWulf (WULF) shares are currently overvalued with a Value Score of F, trading at a price/book ratio of 31.18X compared to the industry average of 3.55X and the finance sector's 4.24X [1][8] - Year-to-date, TeraWulf shares have appreciated 122.9%, significantly outperforming the industry and sector returns of 3.2% and 12.8%, respectively [4][5] Valuation and Performance - TeraWulf's valuation is stretched, trading at a steep 31.18X book value, which is considerably higher than peers like Riot Platforms (2.13X) and Cleanspark (2.21X) [8] - The company has self-mined 485 bitcoin in Q2 2025, with mining capacity increasing by 45.5% year-over-year to 12.8 EH/s [9] Revenue Potential - TeraWulf's new deals with Fluidstack and Core42 are expected to add billions in potential revenue, with the Fluidstack deal alone representing approximately $6.7 billion in contracted revenues [10][11] - The company is on track to deliver 72.5 MW of HPC colocation capacity, with revenue generation expected to start in Q3 2025 [9][10] Competitive Landscape - TeraWulf faces stiff competition from Riot Platforms and Cleanspark, which hold significant bitcoin reserves [13] - The company is also impacted by volatility in bitcoin prices due to macroeconomic challenges and uncertainty regarding the U.S. government shutdown [15] Financial Outlook - The Zacks Consensus Estimate for TeraWulf's loss for Q3 2025 has widened to 7 cents per share, with expected revenues of $55.4 million, indicating 104.6% growth year-over-year [17] - For 2025, the consensus estimate for losses has widened to 33 cents per share, with projected revenues of $204.1 million, reflecting a 45.7% increase from 2024 [19] Investment Sentiment - Despite potential revenue growth from new leases and Alphabet's investment, TeraWulf's stretched valuation and increasing losses make it a risky investment [20] - The company currently holds a Zacks Rank 4 (Sell), indicating that investors should avoid the stock at this time [21]