Is Cipher Mining’s Skyrocketing 2025 Returns Justified After Recent Bitcoin ETF Surge?
Thinking about buying, selling, or holding Cipher Mining stock? You are definitely not alone. The buzz around this name has been hard to miss, especially with its wild ride over the past year. Those returns have been nothing short of eye-catching. While the shares stumbled a bit in the last week and dipped 6.6%, zoom out and the story looks very different: up over 64% in the last month, 137.5% year-to-date, and an incredible 179.1% in the past 12 months. If you stretch even further back, Cipher Mining has clocked an astonishing 810.3% return over three years. Most investors would agree that is not your average performance, and these numbers have plenty of people debating whether the company’s recent surge is just the start, or if it is masking some new risks.
So what is been driving all this? For companies like Cipher Mining, catalysts often include broad crypto market moves and regulatory news that shake up the entire industry’s outlook. The appetite for crypto-related stocks has shifted dramatically this year, with investors responding enthusiastically to price action in Bitcoin and growing institutional interest in the blockchain space. Of course, the question on most investors’ minds remains the same: is Cipher Mining actually undervalued, or is recent optimism leading to a frothy price?
That is where the valuation score comes in. Cipher Mining currently scores a 2 out of 6 on standard undervaluation checks. That means it is undervalued in two of the six methods analysts typically use. Not bad, but certainly not a slam dunk. Let’s break down these valuation approaches and see where Cipher Mining stacks up, plus why some investors might still be missing the real picture on its value.
Cipher Mining scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.Approach 1: Cipher Mining Discounted Cash Flow (DCF) Analysis
The Discounted Cash Flow (DCF) model aims to estimate a company's intrinsic value by forecasting its future cash flows and then discounting those projections back to today's dollars. This approach gives investors a sense of what a business is truly worth, based on its ability to generate actual cash over time.
For Cipher Mining, the model uses the 2 Stage Free Cash Flow to Equity method. The company's last twelve months of Free Cash Flow sits at a negative $409.3 million. Analysts forecast that Cipher Mining's cash flow will improve rapidly. By 2029, projected Free Cash Flow reaches $1 billion, with stock performance expected to benefit from a turnaround from losses into robust cash generation. While analyst estimates cover the next five years, cash flow projections beyond 2029 are based on trend extrapolation.
Based on these projections, Cipher Mining’s estimated intrinsic share value is $30.96. According to the model, this is a 63.0% discount versus the current market price. Put simply, the stock appears substantially undervalued from a DCF perspective, assuming these aggressive cash flow improvements are realized.
Result: UNDERVALUED
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Cipher Mining.Approach 2: Cipher Mining Price vs Sales
The Price-to-Sales (P/S) ratio is a go-to valuation metric for growth companies that may not yet be profitable but are rapidly expanding revenue. It allows investors to gauge how much they are paying for each dollar of sales, which is especially useful for companies like Cipher Mining that are investing heavily for future growth and not yet generating consistent earnings.
Growth potential and risk profile can have a big impact on what is considered a “normal” or “fair” P/S ratio. Higher-growth companies typically command higher multiples, reflecting the market’s optimism, while riskier or slower-growing firms might trade at lower ratios to account for uncertainty.
Currently, Cipher Mining trades at a P/S ratio of 28.4x. That is significantly higher than the software industry average of 5.3x and above its peer group’s average of 23.3x. While a comparison to industry or peer averages is helpful for context, it does not fully capture Cipher Mining’s specific growth outlook, risk level, or business model.
This is where Simply Wall St’s proprietary “Fair Ratio” comes in. The Fair Ratio, which stands at 7.5x for Cipher Mining, is tailored to reflect the company’s growth prospects, risks, profitability, industry, and market cap. It goes beyond the blunt industry or peer averages and provides a more precise benchmark for whether the stock’s valuation makes sense given its unique profile.
Comparing the actual P/S of 28.4x to the Fair Ratio of 7.5x, Cipher Mining appears significantly overvalued by this metric, trading at nearly four times what would be typical for a company with its characteristics.
Result: OVERVALUED
Upgrade Your Decision Making: Choose your Cipher Mining Narrative
Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. Narratives are an easy-to-use method that let you spell out your perspective on a company, connecting the story you believe about Cipher Mining, its future potential, risks, and strategy, directly to your financial forecasts and what you see as its fair value. Simply Wall St’s Narratives tool makes it simple to record this story and link it to your estimates for revenue, earnings, and margins, turning your view of the business into a custom forecast and estimated fair price.
Millions of investors use Narratives in the Community section of Simply Wall St to articulate their thesis, update their reasoning as new information comes in, and decide whether a stock is under- or over-valued at any moment. Narratives help you compare your fair value to the current market price, so you can judge for yourself when it makes sense to buy, sell, or hold. Narratives are dynamic, automatically adjusting as new news or earnings data is released.
For example, some Cipher Mining investors use a bullish narrative, believing rapid expansion, strong hash rate growth, and diversification into high-performance computing justify a higher future price and see fair value above $9.00. Others, more cautious, consider the challenges like volatile Bitcoin prices, heavy capital requirements, and evolving tech risks, and assign a lower fair value closer to $6.00. With Narratives, you can easily see, build, and adjust your own story alongside the community, making your investment decisions more informed and tailored to what matters most to you.
Do you think there's more to the story for Cipher Mining? Create your own Narrative to let the Community know!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.
Valuation is complex, but we're here to simplify it.
Discover if Cipher Mining might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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