We initiate at Strong Buy and a $33 PT. Hut 8 Corp. is a fully integrated platform with large-scale energy infrastructure, Bitcoin mining, and next-gen data centers powering HPC/AI workloads.
Underneath crypto's cyclical swings, HUT has methodically positioned for a compound revenue phase, staggering the ramp (Vega) and power utilization discipline while peers chase narrative agnostic. This execution discipline is the basis of our conviction.
Consensus models overrely on linear growth and immediate scale, ignoring the value of risk-adjusted revenue ramp (our 316/546mn FY25E/FY26E revenues are modestly below The street but derived from segment analysis and operational haircuts).
Our valuation framework intentionally resets to forward sales multiple at 5.8/6.3x FY25E/FY26E (vs. 7.7x peer median and a steep correction from today's stretched 34.5x), reflecting the macro headwinds of higher for longer cap costs and stickier liquidity.
The growth story does not depend on runaway BTC prices or perfect execution in AI data centers, but rather HUT's ability to scale within real-world constraints and retain downside protection through energy infrastructure.
Execution derailment is a risk, especially in energizing the Vega pipeline or GPUaaS monetization at scale, as the industry becomes more competitive.
However, with relative valuation reset and upside from a multi-segment growth engine, we see a compelling R/R in a speculative market.
Grid-Embedded Power Pipeline Structural Moat
We believe that Hut 8's growth strategy has differentiated itself by an emphasis on risk-adjusted capital deployment, a feature that is often overlooked in a sector where capacity growth has been largely disconnected from cash flow discipline.