A Fresh Valuation Look at Bitfarms (TSX:BITF) After AI Data Center Pivot Spurs Analyst Upgrades

Bitfarms (TSX:BITF) shares climbed after the company revealed plans to convert its Washington state facility into an artificial intelligence data center. The company is moving beyond cryptocurrency mining into AI infrastructure to diversify its revenue streams.

See our latest analysis for Bitfarms.

The past year has seen Bitfarms swing from heavy volatility to powerful momentum, with a 1-year total shareholder return of 70% and a 164% share price return over the last three months. Recent enthusiasm around the company's AI data center pivot, coupled with sector-wide optimism as crypto markets stabilize, has fueled a surge in share price, even as the stock experienced a brief pullback earlier this month. With its latest strategic moves, Bitfarms is building positive momentum and positioning itself at the crossroads of AI and digital infrastructure.

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With analysts raising their price targets and shares rallying on Bitfarms' ambitious AI pivot, the question now is whether investors are seeing a genuine bargain or if the market has already priced in the company's growth potential from here.

Most Popular Narrative: 30% Undervalued

Bitfarms' most widely followed narrative assigns a fair value of CA$7.01, significantly higher than its recent close of CA$4.89, highlighting the company’s notable upside potential as it pursues bold strategic transformations.

Development of large-scale HPC/AI campuses in emerging data center hubs like Pennsylvania, supported by robust enterprise demand, political tailwinds, and partnerships with top-tier developers like T5, positions Bitfarms for sustained earnings growth and margin expansion through long-term, contracted revenue streams.

Read the complete narrative.

Can Bitfarms really deliver on transformative growth? The narrative hinges on faster revenue expansion, sharper margins, and a future profit multiple that tech giants would envy. Which crucial assumptions are powering this bullish take? Find out what’s really driving that lofty fair value behind the scenes.

Result: Fair Value of $7.01 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, regulatory hurdles for data center conversions and the heavy capital needed for expansion could quickly challenge Bitfarms' bullish growth narrative.

Find out about the key risks to this Bitfarms narrative.

Another View: Multiples Raise Caution

Looking beyond fair value models, on a price-to-sales basis, Bitfarms trades at 7.6x. This is much higher than both its peer average of 3.2x and the broader software industry’s 4.1x. The fair ratio for the company is just 2.8x, so this premium could signal valuation risk if expectations cool. Could this gap close, or is Bitfarms truly in a league of its own?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Bitfarms Narrative

If you have a different perspective or prefer hands-on research, you can quickly dive into the numbers and shape your own Bitfarms outlook in just a few minutes. Do it your way

A great starting point for your Bitfarms research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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