Needham analyst John Todaro has initiated coverage on TeraWulf Inc. (NASDAQ: WULF) with a Buy rating and a price target of $6, citing the company’s strong positioning in the High-Performance Computing (HPC) space.
Todaro highlighted that TeraWulf is among the leading miners in converting data center capacity for HPC, a sector with high margins and significant growth potential. He pointed to long-term contracts that offer revenue and margin transparency, forecasting that the company will bring a 100MW+ HPC site online ahead of competitors.
TeraWulf’s lower capital expenditure needs, compared to its peers, are also seen as an advantage for adapting to HPC demands. Todaro projects TeraWulf will generate approximately $610 million in revenue by 2026, with $350 million coming from HPC. He also expects the company to maintain an attractive 56% adjusted EBITDA margin.
The $6 price target reflects a 12.5x EV/EBITDA multiple on Todaro’s discounted 2026 estimates. While this is a premium to pure-play Bitcoin miners like Riot Platforms (NASDAQ: RIOT) and Iris Energy (NASDAQ: IREN), Todaro believes it’s justified due to TeraWulf’s near-term HPC plans. However, it remains at a modest discount to Core Scientific (NASDAQ: CORZ), which is seen as less risky given its established customer base.
As of the latest check, TeraWulf shares were up 2.36%, trading at $3.91 on Wednesday.
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