Soluna Holdings (SLNH): Evaluating Valuation After $100M Credit Facility and Strategic Expansion Moves

Soluna Holdings (SLNH) just closed a $100 million credit facility from Generate Capital, aiming to expand its green data center footprint. With past financing hurdles settled and fresh partnerships on board, the stage is set for potential growth.

See our latest analysis for Soluna Holdings.

After months of volatility, Soluna Holdings’ momentum has shifted dramatically. Its 30-day share price return surged 348.73%, with a 7-day jump of 83.40% to $4.42 following news of new credit facilities and customer partnerships. However, the 1-year total shareholder return remains modest at 4.74%, and longer-term holders have still seen deep losses over three and five years. As a result, recent excitement may be more about renewed growth potential than a full turnaround just yet.

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But with shares rocketing in just weeks, is all the good news already baked in, or could this be a genuine window for investors to get in before the next phase of growth takes hold?

Price-to-Sales of 4.8x: Is it justified?

Soluna Holdings’ latest close at $4.42 puts its price-to-sales (P/S) ratio at 4.8x. This offers a slight discount to the US Software industry average but appears expensive compared to peers.

The price-to-sales ratio measures what the market is willing to pay today for a dollar of current sales, a common yardstick for high-growth and unprofitable companies like Soluna Holdings. For companies not generating profits, investors often focus on revenue as a tangible indicator of progress and growth potential.

At 4.8x, Soluna's P/S ratio is just below the US industry average of 5x, suggesting some value compared to broader sector trends. However, it appears high when measured against peer companies, which have an average P/S of just 2.3x. The market seems to be pricing in rapid future growth, but this optimism is not matched by fundamentals so far. Additionally, regression analysis suggests a fair P/S ratio of 5.8x, indicating the market might move higher if Soluna can deliver on its growth forecasts.

Explore the SWS fair ratio for Soluna Holdings

Result: Price-to-Sales of 4.8x (ABOUT RIGHT)

However, significant risks remain, including ongoing net losses and the company’s heavy reliance on maintaining above-average revenue growth to justify valuations.

Find out about the key risks to this Soluna Holdings narrative.

Build Your Own Soluna Holdings Narrative

If you think there’s more to the story or want to draw your own conclusions, you have the tools to build a narrative in just minutes. Do it your way.

A great starting point for your Soluna Holdings 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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