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.
Price History & Performance
|Historical stock prices|
|Current Share Price||US$3.32|
|52 Week High||US$11.19|
|52 Week Low||US$2.56|
|1 Month Change||-5.68%|
|3 Month Change||3.11%|
|1 Year Change||-40.07%|
|3 Year Change||n/a|
|5 Year Change||n/a|
|Change since IPO||-63.07%|
Recent News & Updates
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.
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.
|CAN||US Tech||US Market|
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.
|CAN Average Weekly Movement||9.4%|
|Tech Industry Average Movement||7.4%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.7%|
|10% least volatile stocks in US Market||2.8%|
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
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
|CAN fundamental statistics|
Is CAN overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|CAN income statement (TTM)|
|Cost of Revenue||CN¥2.52b|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||16.35|
|Net Profit Margin||43.08%|
How did CAN perform over the long term?See historical performance and comparison
Is CAN undervalued compared to its fair value, analyst forecasts and its price relative to the market?
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
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.
|What is CAN's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does CAN's PE Ratio compare to its peers?
|CAN PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
KODK Eastman Kodak
PMTS CPI Card Group
AVID Avid Technology
DDD 3D Systems
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.
|Current PE Ratio||1.5x|
|Fair PE Ratio||20.4x|
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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How is Canaan forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?
Future Growth Score1/6
Future Growth Score 1/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
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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How has Canaan performed over the past 5 years?
Past Performance Score6/6
Past Performance Score 6/6
Growing Profit Margin
Earnings vs Industry
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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How is Canaan's financial position?
Financial Health Score6/6
Financial Health Score 6/6
Short Term Liabilities
Long Term Liabilities
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.
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What is Canaan current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Cash Flow Coverage
Dividend Yield vs Market
|Canaan Dividend Yield vs Market|
|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.
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How experienced are the management team and are they aligned to shareholders interests?
Average board tenure
Nangeng Zhang (39 yo)
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...
Experienced Board: CAN's board of directors are not considered experienced ( 2.1 years average tenure), which suggests a new board.
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.
|Owner Type||Number of Shares||Ownership Percentage|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Canaan Inc.'s employee growth, exchange listings and data sources
- 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
- Canaan Inc.
- Building 1, Yard 1
- Room 2101, 21st Floor
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|CAN||NasdaqGM (Nasdaq Global Market)||Yes||SPON ADS EACH REP 15 ORD SHS CL A||US||USD||Nov 2019|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/28 00:00|
|End of Day Share Price||2022/09/28 00:00|
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.