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CAN

Canaan NasdaqGM:CAN Stock Report

Last Price

US$3.32

Market Cap

US$569.4m

7D

7.4%

1Y

-40.1%

Updated

28 Sep, 2022

Data

Company Financials +
CAN fundamental analysis
Snowflake Score
Valuation5/6
Future Growth1/6
Past Performance6/6
Financial Health6/6
Dividends0/6

CAN Stock Overview

Canaan Inc. engages in the research, design, and sale of integrated circuit (IC) final mining equipment products by integrating IC products for bitcoin mining and related components primarily in the People’s Republic of China.

Canaan Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Canaan
Historical stock prices
Current Share PriceUS$3.32
52 Week HighUS$11.19
52 Week LowUS$2.56
Beta3.67
1 Month Change-5.68%
3 Month Change3.11%
1 Year Change-40.07%
3 Year Changen/a
5 Year Changen/a
Change since IPO-63.07%

Recent News & Updates

Sep 16

Canaan: Bitcoin Ties Overcome Any Chip Growth Potential, For Now

Summary Canaan has made some solid improvements in the AI chip industry when it comes to cryptocurrency mining, which has helped save on energy costs. But their direct tie to the price of Bitcoin, a cryptocurrency, makes it too volatile to consider as a long-term investment in the space. As a result, I am slightly bearish on the company's long-term prospects and continue to avoid the company, with potentially playing it short if the price of Bitcoin rises. Canaan (CAN) is an interesting company when it comes to the AI chip space, specifically for the cryptocurrency mining sub-industry. They've made some good progress on their mining chips and have seen sales steadily rise over the past few years as they save them and their customers on energy costs. But there's a constant negative to all of this - most of their business and long term prospects are still tightly tied to the price of Bitcoin (BTC-USD). There are a few parts to this, so let's explore those before reaching and expanding on my investment conclusion. Multiple Negatives With Bitcoin Ties The first negative is that the appetite for the company's chips, and the price which they can charge for those chips, is almost directly tied to the price of Bitcoin. The CEO and CFO both acknowledged that as the price of Bitcoin falls, the price for which they can sell their products drops and they lose their ability to generate any meaningful profits. The second part of this is that the company has multiple expenses which are not tied to the price of Bitcoin like the price of energy which they use to mine their own Bitcoin. This is also true with Wafer prices, which means that when the price of Bitcoin is down the hit to their profits will be significantly higher than the hit to their revenues. Higher energy prices are also a negative to the company's own mining of Bitcoin, which the company does quite a lot of. As of their latest report, the company held just shy of 347 Bitcoins, valued today at around $6.9 million. This is also the other negative for the company's valuation and balance sheet when it comes to the price of Bitcoin - the value of those 347 Bitcoins was roughly $17.5 million about a year ago but is now more than halved. This fluctuation, as the price of Bitcoin is expected to remain under pressure, can spell trouble for the company's balance sheet and valuation. Here's the summary the CFO made in their latest earnings call: As the Bitcoin price further decreased in the second quarter, we responsively lowered our product price for spot sales to shoulder the pressure with our clients. On the other hand, wafer price stays high on the cost front. Therefore, we expect the gross margin to decrease dramatically in the second half of this year. Looking forward to the coming quarters, we see a tougher market environment from the lower Bitcoin price level, overall increased energy price, and various pandemic and geopolitical uncertainties globally... Let's Expand On These A Bit The cryptocurrency mining market projections have shrunk in recent months as the price of Bitcoin and other cryptocurrencies have plummeted from their highs. Now, analysts and market experts expect the cryptocurrency mining market to grow at a CAGR (compound annual growth rate) of just 2.8% through 2028. When it comes to the company's cost, it's their precise existence which is causing these price increases. Even as the chip shortage is resolving and supply chain constraints are easing, companies which create the Wafers which are used to create these mining chips are raising prices by around 20% to accommodate for the increased demand from cryptocurrency miners. The price of energy in the People's Republic of China is also expected to remain high. Even though the world's soon-to-be largest economy is transitioning towards renewable energies, they still consume most of it from gas and the cost generating that electricity is expected to rise through 2024. There Are Positives The company does have a bunch of positive factors going for it, with the main one being that there is still demand for their products around the world as they work with their headquarters in Singapore in order to expand their business internationally into other East Asian nations in order to avoid some of the limits by the People's Republic of China on cryptocurrency mining. The company grew their revenues quite a bit on a year over year basis, but there's a factor of comparisons going on here as their main base of operations was locked down during the 2021 COVID-19 spike in the People's Republic of China. Even so, compared to the 2020 period, the company saw a big surge in revenues and is expected to report $724 million in sales this year. This figure is expected to then grow by over 31% to $954 million in 2023 and then another 6.4% to just over $1 billion by 2024. Even though I don't believe these estimates will be met, it shows that the company's products are good and that current demand is strong. Valuation Isn't Possible, But Future Is Shaky I don't think that given the fact that the company's core growth is so dependent on the price of an external and sporadic cryptocurrency, a fair value is even possible to fine. As a result, I look at the company from a risk to reward standpoint rather than a specific price point.

Aug 17

Canaan Q2 2022 Earnings Preview

Canaan (NASDAQ:CAN) is scheduled to announce Q2 earnings results on Thursday, August 18th, before market open. The consensus EPS Estimate is $0.39 (+77.3% Y/Y) and the consensus Revenue Estimate is $254.67M (+52.0% Y/Y). Over the last 3 months, EPS estimates have seen 0 upward revisions and 1 downward. Revenue estimates have seen 0 upward revisions and 1 downward.

Shareholder Returns

CANUS TechUS Market
7D7.4%-3.3%-5.8%
1Y-40.1%5.6%-22.1%

Return vs Industry: CAN underperformed the US Tech industry which returned 5.6% over the past year.

Return vs Market: CAN underperformed the US Market which returned -22.1% over the past year.

Price Volatility

Is CAN's price volatile compared to industry and market?
CAN volatility
CAN Average Weekly Movement9.4%
Tech Industry Average Movement7.4%
Market Average Movement6.9%
10% most volatile stocks in US Market15.7%
10% least volatile stocks in US Market2.8%

Stable Share Price: CAN is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: CAN's weekly volatility has decreased from 16% to 9% over the past year.

About the Company

FoundedEmployeesCEOWebsite
2013346Nangeng Zhanghttps://canaan-creative.com

Canaan Inc. engages in the research, design, and sale of integrated circuit (IC) final mining equipment products by integrating IC products for bitcoin mining and related components primarily in the People’s Republic of China. It is also involved in the assembly and distribution of mining equipment and spare parts. The company has a strategic cooperation with Northern Data AG in the areas of artificial intelligence development, blockchain technology, and datacenter operations.

Canaan Fundamentals Summary

How do Canaan's earnings and revenue compare to its market cap?
CAN fundamental statistics
Market CapUS$569.39m
Earnings (TTM)US$389.52m
Revenue (TTM)US$904.27m

1.5x

P/E Ratio

0.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
CAN income statement (TTM)
RevenueCN¥6.51b
Cost of RevenueCN¥2.52b
Gross ProfitCN¥3.99b
Other ExpensesCN¥1.18b
EarningsCN¥2.80b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)16.35
Gross Margin61.26%
Net Profit Margin43.08%
Debt/Equity Ratio0%

How did CAN perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is CAN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for CAN?

Other financial metrics that can be useful for relative valuation.

CAN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.2x
Enterprise Value/EBITDA0.4x
PEG Ratio-0.1x

Price to Earnings Ratio vs Peers

How does CAN's PE Ratio compare to its peers?

CAN PE Ratio vs Peers
The above table shows the PE ratio for CAN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average24.9x
KODK Eastman Kodak
64.2xn/aUS$384.9m
PMTS CPI Card Group
8.8x31.1%US$171.8m
AVID Avid Technology
21.7x17.3%US$1.0b
DDD 3D Systems
5x-11.1%US$1.1b
CAN Canaan
1.5x-10.5%US$569.4m

Price-To-Earnings vs Peers: CAN is good value based on its Price-To-Earnings Ratio (1.5x) compared to the peer average (24.9x).


Price to Earnings Ratio vs Industry

How does CAN's PE Ratio compare vs other companies in the Global Tech Industry?

Price-To-Earnings vs Industry: CAN is good value based on its Price-To-Earnings Ratio (1.5x) compared to the Global Tech industry average (13.2x)


Price to Earnings Ratio vs Fair Ratio

What is CAN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CAN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio1.5x
Fair PE Ratio20.4x

Price-To-Earnings vs Fair Ratio: CAN is good value based on its Price-To-Earnings Ratio (1.5x) compared to the estimated Fair Price-To-Earnings Ratio (20.4x).


Share Price vs Fair Value

What is the Fair Price of CAN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: CAN ($3.32) is trading below our estimate of fair value ($79.49)

Significantly Below Fair Value: CAN is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.


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Future Growth

How is Canaan forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


-10.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CAN's earnings are forecast to decline over the next 3 years (-10.5% per year).

Earnings vs Market: CAN's earnings are forecast to decline over the next 3 years (-10.5% per year).

High Growth Earnings: CAN's earnings are forecast to decline over the next 3 years.

Revenue vs Market: CAN's revenue (12.4% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: CAN's revenue (12.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CAN's Return on Equity is forecast to be low in 3 years time (19.9%).


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Past Performance

How has Canaan performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


65.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CAN has high quality earnings.

Growing Profit Margin: CAN's current net profit margins (43.1%) are higher than last year (5.2%).


Past Earnings Growth Analysis

Earnings Trend: CAN's earnings have grown significantly by 65.1% per year over the past 5 years.

Accelerating Growth: CAN's earnings growth over the past year (3094.1%) exceeds its 5-year average (65.1% per year).

Earnings vs Industry: CAN earnings growth over the past year (3094.1%) exceeded the Tech industry 83.9%.


Return on Equity

High ROE: CAN's Return on Equity (59.7%) is considered outstanding.


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Financial Health

How is Canaan's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: CAN's short term assets (CN¥5.7B) exceed its short term liabilities (CN¥1.5B).

Long Term Liabilities: CAN's short term assets (CN¥5.7B) exceed its long term liabilities (CN¥16.9M).


Debt to Equity History and Analysis

Debt Level: CAN is debt free.

Reducing Debt: CAN had no debt 5 years ago.

Debt Coverage: CAN has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: CAN has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


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Dividend

What is Canaan current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Canaan Dividend Yield vs Market
How does Canaan dividend yield compare to the market?
SegmentDividend Yield
Company (Canaan)n/a
Market Bottom 25% (US)1.7%
Market Top 25% (US)4.7%
Industry Average (Tech)1.1%
Analyst forecast in 3 Years (Canaan)n/a

Notable Dividend: Unable to evaluate CAN's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate CAN's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CAN's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CAN's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as CAN has not reported any payouts.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average board tenure


CEO

Nangeng Zhang (39 yo)

no data

Tenure

Mr. Nangeng Zhang serves as Chairman of the Board and Chief Executive Officer of Canaan Inc. Mr. Zhang has approximately 11 years of experience in electronic device design, engineering, manufacturing, qual...


Board Members

Experienced Board: CAN's board of directors are not considered experienced ( 2.1 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

What is the ownership structure of CAN?
Owner TypeNumber of SharesOwnership Percentage
Private Companies1,605,8020.9%
Institutions32,820,93819.1%
Individual Insiders59,637,51534.8%
General Public77,438,01945.2%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 52.6% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
12.12%
Nangeng Zhang
20,785,483CN¥69.0m0%no data
7%
Jiaxuan Li
12,004,073CN¥39.9m0%no data
5.37%
Xiangfu Liu
9,212,129CN¥30.6m0%no data
3.65%
Enguang Li
6,263,309CN¥20.8m0%no data
3.62%
Invesco Capital Management LLC
6,208,293CN¥20.6m163.91%0.01%
3.6%
Qifeng Sun
6,173,301CN¥20.5m0%no data
3.58%
The Vanguard Group, Inc.
6,133,940CN¥20.4m40.07%no data
3.03%
Jianping Kong
5,199,220CN¥17.3m0%no data
1.27%
Point72 Asset Management, L.P.
2,183,683CN¥7.2m11778.17%0.02%
1.27%
Toroso Investments, LLC
2,178,975CN¥7.2m-10.61%0.22%
1.18%
BlackRock, Inc.
2,018,557CN¥6.7m13.02%no data
0.97%
Invesco Ltd.
1,662,404CN¥5.5m206.72%no data
0.94%
Hk Jiaji Science And Technology Limited
1,605,802CN¥5.3m0%no data
0.84%
Mirae Asset Global Investments Co., Ltd
1,447,629CN¥4.8m4.84%0.01%
0.82%
Polunin Capital Partners Limited
1,403,041CN¥4.7m6042.64%0.49%
0.72%
State Street Global Advisors, Inc.
1,242,062CN¥4.1m-19.33%no data
0.48%
Exchange Traded Concepts, LLC
830,912CN¥2.8m-10.86%0.05%
0.39%
Van Eck Associates Corporation
671,717CN¥2.2m-15.54%no data
0.32%
BG Fund Management Luxembourg S.A.
551,700CN¥1.8m0%0.07%
0.25%
Sabby Management, LLC
436,015CN¥1.4m788.77%2.03%
0.25%
Norges Bank Investment Management
431,607CN¥1.4m0%no data
0.24%
Susquehanna International Group, LLP, Asset Management Arm
407,870CN¥1.4m7.66%no data
0.23%
SRN Advisors, LLC
396,499CN¥1.3m-30.88%0.78%
0.23%
Wellington Management Group LLP
394,971CN¥1.3m112.23%no data
0.22%
Citadel Advisors LLC
370,952CN¥1.2m46.34%no data

Company Information

Canaan Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Canaan Inc.
  • Ticker: CAN
  • Exchange: NasdaqGM
  • Founded: 2013
  • Industry: Technology Hardware, Storage and Peripherals
  • Sector: Tech
  • Implied Market Cap: US$569.388m
  • Shares outstanding: 171.50m
  • Website: https://canaan-creative.com

Number of Employees


Location

  • Canaan Inc.
  • Building 1, Yard 1
  • Room 2101, 21st Floor
  • Beijing
  • 100094
  • China


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CANNasdaqGM (Nasdaq Global Market)YesSPON ADS EACH REP 15 ORD SHS CL AUSUSDNov 2019

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/28 00:00
End of Day Share Price2022/09/28 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.