Is IREN Set for More Gains After 49% Surge and Partnership News?

If you have been following IREN stock lately or are considering hopping on board, you have probably noticed some attention-grabbing numbers. After all, IREN’s share price closed yesterday at 62.42, capping off a week where the stock surged 13.1%. The last month alone has seen a sky-high jump of 49.1%, and the year-to-date return sits at a jaw-dropping 496.7%. Looking even further back, IREN has delivered 491.7% over the past year and a remarkable 1741.3% over three years. With those kinds of moves, it is no surprise that investors are asking: is now the right time to buy, sell, or hold?

Behind these moves, much of the buzz comes from newly announced partnerships aimed at boosting IREN’s operational efficiency, along with industry chatter around regulatory developments that could play in the company’s favor. While these headlines have fanned investor optimism, they also raise a critical question: does the current share price reflect genuine growth prospects or is enthusiasm running ahead of fundamentals?

When it comes to classic valuation metrics, IREN gets a value score of 0 out of 6. This means the company does not look undervalued by any of the standard checks most analysts use—not exactly the reassuring green flag bargain hunters look for, especially with such a stunning price rally already in place.

So how do we make sense of IREN’s market value today? In the next section, I will break down the different approaches used to assess stock valuation and show how IREN stacks up against each. And if you want the best insight into what IREN is really worth, make sure to stick around until the end, where we unveil an even more powerful way to judge a stock’s true value.

IREN scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: IREN Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates what a company is really worth by projecting its future cash flows and then discounting those amounts back to today’s dollars. For IREN, analysts use the free cash flow the business generates as the starting point, and then factor in expectations for growth over several years.

Currently, IREN’s free cash flow is negative, with the last twelve months showing a cash outflow of $1,045.6 million. According to analyst projections, the company is expected to see improvement in the years ahead, with free cash flow forecasted to turn positive by 2027 and reach $276.9 million. Simply Wall St extends the outlook further, estimating IREN could generate around $925.1 million in annual free cash flow by 2035, although these longer-term numbers are extrapolations beyond official analyst estimates.

After crunching the numbers, the DCF model suggests IREN’s intrinsic value is $43.33 per share. Comparing this to the current share price of $62.42, the stock appears to be around 44.1% overvalued according to the model.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for IREN.

Our Discounted Cash Flow (DCF) analysis suggests IREN may be overvalued by 44.1%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: IREN Price vs Sales

The price-to-sales (P/S) ratio is a solid valuation metric, especially for companies that are not yet profitable or have volatile earnings. It compares a company’s market value directly to its annual revenues. For fast-growing or younger companies, looking at the P/S ratio provides a clearer picture of how the market values their growth potential and overall scale, without being distorted by temporary profit fluctuations.

Growth expectations and risk play a big role in what a "normal" or "fair" P/S ratio should be. Companies that are growing quickly or have lower risk profiles often command higher P/S multiples, since investors are willing to pay a premium for stronger future prospects and stability. On the other hand, lower-growth or riskier companies tend to trade at lower multiples.

IREN is currently trading on a lofty P/S ratio of 34.1x, noticeably higher than both the software industry average of 5.4x and the peer group average of 32.3x. These numbers indicate that the market is pricing in high future growth for IREN, even more than what is typical for its industry and direct competitors. However, Simply Wall St’s proprietary Fair Ratio model, which takes into account the company’s unique characteristics such as earnings growth, profit margin, market cap, and risks, suggests a fair P/S ratio for IREN of 18.6x. This approach is a significant improvement over just comparing with peers or the industry, as it adjusts for factors that truly affect a company’s valuation rather than applying a one-size-fits-all approach.

Given that IREN’s current P/S ratio is almost double its Fair Ratio, the stock appears overvalued on this metric.

Result: OVERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your IREN Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a simple, interactive way for investors to spell out their view of a company by combining their story (why the company will win or lose) with their expectations for future revenue, profit margins, and the resulting Fair Value per share.

Narratives make investing more human and more insightful by linking each company’s unique story directly to its financial future. You set your own forecast and see what that means for fair value, all side by side with other investors on the Community page of Simply Wall St, where millions of users share their views.

This tool empowers investors to see at a glance when their personal Fair Value is above or below the current price, helping them make confident buy, sell, or hold decisions based on updated information, whether that is the latest earnings, news, or changes in the market.

For example, some investors believe IREN could more than double thanks to rapid AI infrastructure growth and assign a Fair Value over $89 per share, while others see execution risks and estimate as low as $11. With Narratives, both perspectives (and the numbers behind them) are visible and update automatically as new data arrives, making it easy to find the story and the valuation that matches your own outlook.

For IREN, we'll make it really easy for you with previews of two leading IREN Narratives:

🐂 IREN Bull Case

Fair Value: $89.00

Currently trading at 29.8% below fair value

Revenue Growth Rate: 41.42%

• IREN leverages 100% renewable energy for its North American Bitcoin mining operations and is rapidly expanding into AI and HPC data centers to diversify revenue.
• Financial position is robust after recent capital raises, with no debt, strong cash reserves, and a focus on operational efficiency. Ambitious growth plans target a significant increase in mining and computing power.
• Main risks include future shareholder dilution, execution in new AI and HPC segments, Bitcoin price volatility, and an evolving regulatory environment.

🐻 IREN Bear Case

Fair Value: $57.00

Currently trading at 9.5% above fair value

Revenue Growth Rate: 73.19%

• IREN’s business model aligns closely with new federal policies, positioning the company to benefit from expedited permitting and financial support for large-scale AI data center projects.
• Valuation is lofty by traditional metrics, with major upside reliant on flawless execution, sustained policy support, and capturing high-margin AI and cloud growth opportunities.
• Key risks include execution missteps, policy reversals, market volatility, and intense competition from both established infrastructure and technology players.

Do you think there's more to the story for IREN? 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.

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