TLDR
- IREN stock fell 11.5% to $39.79 Thursday after reporting Q2 EPS loss of ($0.52) against ($0.07) estimate and $184.7M revenue versus $229.6M forecast.
- Company swung from $384.6M profit in Q1 to ($155.4M) loss in Q2, representing a massive $540M quarterly reversal.
- Analysts hold “Moderate Buy” consensus with $69.36 target price despite the earnings disappointment and share price decline.
- Microsoft AI partnership development is viewed as critical catalyst for stock recovery if the company can deliver on execution.
- Bitcoin price movements and inverse ETF launch increase near-term volatility and trading risk for shareholders.
IREN stock dropped 11.5% Thursday as investors reacted to a disappointing second-quarter earnings report. Shares closed at $39.79, falling from the previous close of $44.94.
The data center and AI infrastructure company posted an EPS loss of ($0.52). Wall Street had forecast a loss of ($0.07). The ($0.45) miss represented a massive disappointment for shareholders expecting better results.
Revenue totaled $184.7 million for the quarter. Consensus estimates called for $229.6 million. The company fell short by approximately $45 million, missing the mark by nearly 20%.
Volume jumped 35% to 60.4 million shares as the selloff intensified. Average daily volume typically runs around 44.8 million shares. The stock touched an intraday low of $38.90 before recovering slightly.
Bottom Line Takes Major Hit
The profitability picture deteriorated sharply quarter-over-quarter. IREN reported a net loss of ($155.4M) in Q2. The previous quarter showed a profit of $384.6 million.
That represents a $540 million swing in net income over just three months. The reversal raises questions about margin sustainability and operational efficiency going forward.
Co-CEO Daniel Roberts emphasized progress on capacity expansion in the earnings release. The company has secured more than 4.5 gigawatts of power. Management is targeting $3.4 billion in annual recurring revenue as the platform scales.
Roberts highlighted customer demand and delivery track record as competitive advantages. But the numbers tell a different story right now.
Wall Street Stays Patient
Analyst sentiment remains constructive despite the earnings miss. The stock carries a “Moderate Buy” consensus rating. Thirteen analysts rate it a buy, five have holds, and one recommends selling.
The average price target sits at $69.36. That implies 74% upside from current trading levels. Roth MKM maintains the highest target at $94 with a buy rating.
Citigroup launched coverage with an outperform rating in November. Citizens JMP assigned a market outperform rating with an $80 price target. UBS Group maintains a buy rating on shares.
The Microsoft AI partnership remains the focal point for bulls. If IREN can scale that relationship successfully, the stock could see strong upside. Execution will determine whether those price targets are achievable.
Crypto Link Drives Volatility
IREN’s performance tracks closely with Bitcoin prices. When crypto markets weaken, the stock typically follows. That pattern played out again this week as Bitcoin softened.
The recent launch of an inverse ETF tracking IREN adds complexity. The Tradr 2X Short Iren Daily ETF provides leveraged short exposure. These products can increase volatility during periods of weakness.
Retail traders pointed to a 14% pre-earnings drop as suspicious. Some accused institutions of manipulation. The episode underscores the high-beta nature of this stock.
Institutional investors own 41.08% of outstanding shares. Hood River Capital Management took a new $74.2 million stake in Q2. Situational Awareness LP boosted holdings by 90.1% to 6.4 million shares valued at $93.3 million.
Voloridge Investment Management increased its position by 1,444.5%. Marshall Wace LLP raised its stake by 247.7% to 2 million shares worth $95.4 million.
The company maintains a debt-to-equity ratio of 0.34. Its current ratio stands at 5.52. Market capitalization is $11.28 billion with a P/E ratio of 20.51.
IREN carries a beta of 4.27, indicating extreme volatility relative to the broader market. The 50-day moving average is $46.78, while the 200-day average sits at $42.27.
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