A Fresh Look at IREN (NasdaqGS:IREN) Valuation After Strategic AI Pivot and Profitability Milestone

IREN (NasdaqGS:IREN) has caught the eye of investors this week after revealing a meaningful shift in its business model. The company reported positive cash from operations and is accelerating its focus on high-performance AI infrastructure.

See our latest analysis for IREN.

IREN’s stock has been anything but quiet, notching an exceptional year-to-date share price return of 434% and an eye-catching 504% total shareholder return over 12 months. While short-term trading has seen its ups and downs, including some sharp moves in the past week, the bigger picture shows strengthening momentum as the company’s strategic AI shift gains traction and investors reassess its growth story and risk profile.

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With IREN’s shares hitting new highs and a sharp AI pivot, the question now is whether the stock has further room to run or if the current price already reflects much of its future growth potential.

Most Popular Narrative: 37.2% Undervalued

According to BlackGoat, the narrative’s latest fair value calls for a substantial premium above the last close of $55.86. This suggests the market has not fully captured IREN’s upside based on its growth blueprint and execution so far.

“IREN represents an intriguing yet risky investment opportunity in the evolving landscape of Bitcoin mining and computational services. With its leading efficiency, strategic diversification into HPC and AI, and strong financial footing, IREN is well-positioned to capitalise on future growth opportunities.”

Read the complete narrative.

Want to peek under the hood of this bullish valuation? The narrative factors in not-so-obvious drivers that could send future profits soaring if things break right. Find out which aggressive revenue milestones and margin assumptions power the fair value target, plus why this growth play is more than just a Bitcoin price bet. The methodology and key numbers behind the valuation may surprise even seasoned investors.

Result: Fair Value of $89.00 (UNDERVALUED)

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

However, unexpected regulatory shifts or further share dilution could quickly challenge this bullish narrative and change investor sentiment toward IREN’s ongoing transformation.

Find out about the key risks to this IREN narrative.

Another View: Multiples Tell a Different Story

While the narrative's fair value suggests big upside, the current valuation based on the price-to-sales multiple raises caution. IREN trades at 30.5x sales, which is much higher than the US Software industry average of 5.2x and even above its fair ratio of 17.3x. This hefty premium means investors could be paying far ahead for future growth, especially if expectations shift.

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

Build Your Own IREN Narrative

If you see things differently, or prefer your own deep dive into IREN’s numbers, you can build a fresh narrative in just a few minutes. Do it your way

A great starting point for your IREN research is our analysis highlighting 2 key rewards and 4 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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