Should Investors Exit WULF Stock at a High P/S Multiple of 18.24x?

Core Insights - TeraWulf (WULF) shares are currently overvalued with a Value Score of F, trading at a 12-month price/sales (P/S) ratio of 18.24X, significantly higher than the Zacks Financial-Miscellaneous Services industry at 3.23X and the Zacks Finance sector at 8.9X [1][8] Financial Performance - Over the past month, WULF shares have declined by 4.9%, underperforming the Zacks Finance sector's gain of 2.4% and the S&P 500's return of 0.7% [3] - The Zacks Consensus Estimate for the fourth-quarter 2025 loss is projected at 12 cents per share, widening by 5 cents over the past 30 days, with a total estimated loss of $1.51 per share for 2025, worsening by $1.18 [13][15] Debt and Financial Risks - TeraWulf's total liabilities reached $2.2 billion against $2.5 billion in assets, primarily due to $1.06 billion in convertible notes, with significant financing secured recently, including $3.2 billion in senior secured notes due in 2030 [10] - The company reported a $424.6 million loss in the third quarter from Google-related warrants and convertible features, indicating serious financial risks [10] Regulatory and Client Risks - TeraWulf faces increasing regulatory and environmental challenges that could disrupt its bitcoin mining and HPC expansion plans, with potential delays in projects and profitability pressures [11] - The company's reliance on a few major hyperscale clients, particularly Google-backed Fluidstack and Core42, adds strategic risk to its long-term outlook [12] Earnings Performance - TeraWulf has missed the Zacks Consensus Estimate in all trailing four quarters, with an average negative surprise of 82.14%, highlighting concerns around profitability [14]