Last Update 30 Nov 25

CORZ: Terminated Merger Will Unlock New Upside With Power Pipeline Expansion

Analysts have modestly raised their price target for Core Scientific to $27 from $23, citing the terminated merger and increased confidence in the company’s standalone prospects as key factors supporting improved valuation.

Analyst Commentary

Recent street research reflects a range of perspectives on Core Scientific's prospects as a standalone company, especially after the terminated merger. While several analysts have upgraded their outlooks and raised price targets, others have surfaced cautious viewpoints about future execution and sector headwinds.

Bullish Takeaways

Bullish analysts have raised their price targets, now ranging from $23.50 to $34. This signals renewed confidence in Core Scientific's valuation following the terminated merger.
There is a consensus that the cancellation of the CoreWeave deal removes a major overhang and reinforces management's ability to unlock value independently.
The company's strong power pipeline and capacity to lease for high performance compute are seen as significant growth drivers, supporting a favorable risk/reward profile.
Broader sector dynamics, particularly robust demand for AI and control of power infrastructure, are viewed as tailwinds that can benefit Core Scientific as well as other firms with sizeable power portfolios.

Bearish Takeaways

Bearish analysts highlight that, while the company avoided a potentially dilutive deal, execution risk persists in navigating the standalone strategy and scaling its HPC operations.
Competition for power resources and increased investor scrutiny of long-term growth versus acquisition-driven expansion could limit share price upside in the near term.
Persistent sector-wide challenges, such as volatility in demand for data center capacity and supply constraints around power, land, and infrastructure, may affect Core Scientific's ability to fully capitalize on ongoing industry tailwinds.

What's in the News

Japan's financial regulator plans to require crypto exchanges to hold liability reserves, impacting listed firms including Core Scientific (Nikkei).
CoreWeave’s CEO cited delays at third-party data center developers, identified as Core Scientific, as key to missing full-year guidance. This contributed to drops in both companies’ stock prices (CNBC).
CoreWeave confirmed it will not raise its $9 billion acquisition offer for Core Scientific after proxy advisors Glass Lewis and ISS advised shareholders to reject the bid (Bloomberg).
ISS recommended Core Scientific shareholders vote against the pending buyout by CoreWeave, influencing the eventual termination of the merger discussions (Bloomberg).

Valuation Changes

Consensus Analyst Price Target has increased to $27.65, reflecting greater confidence in Core Scientific's valuation.
Discount Rate has decreased slightly, moving from 9.11% to 9.04%, which implies marginally reduced perceived risk.
Revenue Growth projections remain unchanged at 62.33%, supporting expectations for strong top-line expansion.
Net Profit Margin is stable at 27.56%, indicating analysts see similar profitability levels moving forward.
Future P/E ratio has declined modestly from 34.56x to 33.03x, suggesting slightly improved earnings expectations or valuation discipline.

Reallocating resources from Bitcoin mining to HPC infrastructure could drive future growth amid rising data center demands and diversified clientele.
Debt restructuring and 0% interest funding improve growth potential and operational efficiencies through strategic hires, enhancing financial stability and earnings.
Dependency on CoreWeave, shift in strategy, restructuring uncertainties, and execution delays pose risks to growth and profitability.

Catalysts

About Core Scientific

Provides digital asset mining services in the United States.What are the underlying business or industry changes driving this perspective?

Core Scientific secured a major HPC contract with CoreWeave, with a total revenue potential of $8.7 billion over a 12-year term, significantly boosting future revenue compared to their current levels.
The company is expanding HPC infrastructure capacity by reallocating resources from Bitcoin mining, adding new sites, and extending existing ones, expecting to drive future revenue growth as data center needs rise.
Core Scientific’s ability to diversify its customer base and reduce reliance on CoreWeave as a primary client could improve margins and provide more stable revenue streams in the long term.
The improved balance sheet following significant debt restructuring and raising $625 million through a convertible note offering at 0% interest rates positions the company to effectively fund future growth initiatives with lower interest costs, improving net margins.
Strategic hires of data center professionals enhance execution capabilities, likely leading to increased operational efficiencies, positively impacting earnings as the company grows its data center business.

Core Scientific Earnings and Revenue Growth

Core Scientific Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Core Scientific's revenue will grow by 60.9% annually over the next 3 years.
Analysts assume that profit margins will increase from -170.8% today to 23.0% in 3 years time.
Analysts expect earnings to reach $334.4 million (and earnings per share of $0.83) by about September 2028, up from $-595.2 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $432.4 million in earnings, and the most bearish expecting $23 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 27.8x on those 2028 earnings, up from -7.0x today. This future PE is lower than the current PE for the US Software industry at 36.6x.
Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 9.21%, as per the Simply Wall St company report.

Core Scientific Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The shift from Bitcoin mining to HPC hosting and the resulting decline in digital asset hosted mining revenue, which was down significantly from $30 million to $6.5 million, could adversely impact overall revenue if the new strategy doesn't ramp up as expected.
The company faced a net loss of $265 million in the fourth quarter of 2024, an increase from the previous year's loss, raising concerns about its ability to reach profitability and improve net margins in the near term.
The dependency on a singular client, CoreWeave, for a significant portion of projected revenue introduces concentration risk. If CoreWeave's demand or business model shifts unfavorably, it could dramatically decrease Core Scientific's forecasted earnings.
With the recent Chapter 11 debt restructuring, there remains uncertainty about the company’s long-term financial health and its reliance on future capital expenditures, which could put strain on cash flow and negate earnings improvements.
The delayed rollout of planned HPC capacity expansions due to permitting and equipment issues could slow revenue growth and heighten execution risk, potentially impacting future earnings.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $19.045 for Core Scientific based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $23.0, and the most bearish reporting a price target of just $15.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.5 billion, earnings will come to $334.4 million, and it would be trading on a PE ratio of 27.8x, assuming you use a discount rate of 9.2%.
Given the current share price of $13.58, the analyst price target of $19.05 is 28.7% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

CORZ: Power Portfolio And AI Demand Will Unlock Substantial Upside