Is It Too Late to Consider IREN After Shares Jumped 87% in One Month?

If you are watching IREN stock and wondering whether now is the right time to get in or cash out, you are not alone. The last year has been a bit of a roller coaster, in the best way possible for shareholders. Over just seven days, the stock has risen by 8.3%, and if you zoom out to a month, it’s popped a remarkable 87.3%. Those returns are just the tip of the iceberg compared to the year-to-date gain of 300.2%, or a staggering 373.0% over twelve months. For those who have held on for the long haul, the three-year return comes in at 913.6%.

Such explosive moves often aren’t just noise; they can reflect shifting market sentiment, new developments in the company’s business strategy, or broader shifts in the sector. For IREN, a lot of this excitement has come as investors re-evaluate the company’s growth potential and risk profile. Recent activity related to the rapidly evolving digital asset infrastructure sector, as well as expansions in operational capacity, have contributed to the bullish mood, even though detailed reaction to earnings or explicit company guidance isn’t driving the moves right now.

But here’s the catch: when you apply the usual valuation yardsticks, IREN doesn’t check any boxes for being undervalued. Its value score lands at 0 out of 6. That’s going to make for an interesting discussion as we look at the different ways investors try to put a number on what IREN is truly worth. Let’s break down the main valuation approaches next, and stick around for a perspective that might give you an even clearer edge on what this stock could do from here.

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

A Discounted Cash Flow (DCF) model estimates a company's intrinsic value by forecasting its future cash flows and discounting those amounts back to today's value. This approach is widely used because it focuses on the business’s fundamental cash generation rather than market sentiment.

For IREN, current Free Cash Flow stands at -$1,045.6 Million, signaling negative cash generation over the last twelve months. However, analysts expect a sharp turnaround, projecting Free Cash Flow to swing into positive territory and reach $212.4 Million by mid-2027. Looking further ahead, extrapolations suggest IREN’s Free Cash Flow could climb to roughly $622.8 Million by 2035. While such growth would be impressive, it is important to realize that the projections beyond five years are largely based on algorithmic estimates rather than direct analyst forecasts.

According to the DCF calculation, the estimated intrinsic fair value per share comes out to $28.41. Compared to IREN’s current market price, the DCF model suggests the stock is trading at a 47.3% premium to its intrinsic value. In plain language, this means investors are paying well above what the company’s cash flows would typically justify.

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 47.3%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: IREN Price vs Earnings (PE Ratio)

For companies that are profitable, the Price-to-Earnings (PE) ratio is a classic and useful yardstick. It lets investors quickly see how much they are paying for every dollar of current earnings. The assumption is that higher growth and lower risk warrant a higher multiple, while sluggish or uncertain outlooks deserve a lower one.

IREN’s current PE ratio is 130.95x, which stands out dramatically against both its industry average of 35.99x for Software stocks and a peer average of 22.41x. At a surface level, such a high multiple implies extremely optimistic expectations for future earnings growth, margin expansion, or both, or perhaps an underappreciation of potential risks. However, benchmarks like industry and peer averages do not tell the full story since they do not tailor for a company’s specific outlook.

This is where the Simply Wall St "Fair Ratio" comes in. The Fair Ratio for IREN is calculated at 77.92x, blending together its growth profile, profit margins, market cap, risks, and its position in the industry for a more nuanced perspective. Since this approach incorporates far more than just broad market comparisons, it serves as a better reality check for what the company’s true valuation ought to be.

With IREN’s current PE at 130.95x and a Fair Ratio of 77.92x, the stock appears to be trading well above what its fundamentals justify according to this model.

Result: OVERVALUED

PE 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 practical tool that lets you set out your own story and assumptions about a company, such as your views on IREN’s future revenue, profit margins, and what its fair value should be. This way, you can see the numbers behind your perspective in an organized format.

A Narrative links your view of a company's future to a financial forecast and, ultimately, a fair value, connecting the company’s story directly with real numbers. This approach puts you in control. You can build, edit, and share Narratives easily on Simply Wall St’s Community page, where millions of investors compare ideas.

Narratives help you decide when to buy or sell by automatically comparing your expected fair value to the latest market price, updating dynamically as news, earnings, or market sentiment shift. Investors often hold very different views. For example, on IREN, some put fair value at $16 per share based on cautious growth and Bitcoin prices, while the most bullish arguments point to $70 per share if AI data center growth and institutional demand take off. Your Narrative brings your unique view together with up-to-date data, so you can act with more conviction and less confusion.

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

• 🐂 IREN Bull Case

  Fair value: $72.52

  Current vs narrative fair value: -42.27%

  Revenue growth rate: 40%

  • Leadership in sustainable Bitcoin mining powered by 100% renewable energy and rapid expansion in both mining operations and AI/high performance computing services.
  • Strong financial position with $425 million cash, no debt, and profitability recently achieved. The company has ambitious growth plans aiming for 30 EH/s capacity by year-end and potential growth to 40 EH/s in 2025.
  • The investment case depends on further Bitcoin price appreciation and successful diversification into AI services, while acknowledging significant risks such as dilution and cryptocurrency price volatility.
• 🐻 IREN Bear Case

  Fair value: $26.07

  Current vs narrative fair value: +60.63%

  Revenue growth rate: 60%

  • Recent record financial performance, with IREN reporting strong revenues and major increases in mining capacity and efficiency, but the stock price already factors in these positives.
  • Strategic emphasis is shifting from Bitcoin mining, where expansion is paused at 50 EH/s, to building large-scale AI cloud and data center infrastructure. This transition requires heavy funding and additional capital.
  • The outlook highlights high expected capital needs for further expansion, reliance on funding via debt and equity, and the risk that future growth and profitability may not fully justify the current elevated share price.

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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