Summary CleanSpark's focus on Bitcoin mining over HPC/AI services has proven beneficial, with CLSK outperforming many mining companies that pursued HPC/AI data centers. CleanSpark's 'sats per share' has grown the fastest among peers, reflecting effective shareholder value despite a decline in stock price. CleanSpark's break-even cost to mine Bitcoin is estimated at $75k, making it one of the more efficient public mining companies. With Bitcoin potentially bottoming and CleanSpark's strong operational metrics, CLSK could be a compelling investment opportunity. Back in early January , I left readers with the following thought regarding CleanSpark ( CLSK ) and the company's commitment to mining Bitcoin ( BTC-USD ) rather than chasing HPC service revenue like most of the other public companies in the sector: Once upon a time, there was a rush to Bitcoin mining because the profit margin was so tremendous. Through HPC data centers, the allure of robust gross margins has led to yet another 'gold rush' though this one is attached to artificial intelligence and electrical infrastructure. Those fat margins could certainly prove to be temporary. In the event of a possible HPC data center bust, the companies that stick with Bitcoin mining could theoretically outperform those that chase HPC services. Subsequent to that article, we've indeed seen the wind start to come out of the 'data center margin' sails, in part, due to the emergence of DeepSeek as well as Microsoft ( MSFT ) becoming more cautious regarding AI-related data center capex. As fate would have it, CleanSpark stock has indeed held up better than many of the mining companies that have been more enthusiastic about HPC/AI data center segments year to date: Data by YCharts Many of the mining companies leaning hard into HPC/AI are down 35-45% year to date, while CLSK is actually in line with the Nasdaq 100 in 2025. With the AI/HPC trade seemingly running out of steam and Bitcoin potentially putting in a short term bottom, is it time to consider exposure to CLSK? In this update, we'll look at CleanSpark's sats per share trend, estimated break-even cost, and current valuation multiples. Break-even Cost Estimate April Investor Deck, Slide 5 (CleanSpark) In the company's April investor deck, CleanSpark noted a $34,011 cost to mine a single Bitcoin in Q4-24. While the company is indeed one of the lower-cost miners in the public mining sector, CleanSpark's all-in cost to mine is actually far higher than $34k per coin. I've generally felt that, while they can be helpful otherwise, cost-to-mine figures that don't include the full scope of corporate expense can mislead shareholders into believing mining companies are more profitable than they actually are. Given that, I've often provided readers with a back-of-the-envelope estimate for mining break-even cost by including opex with COGS: CleanSpark Q1-24 Q2-24 Q3-24 Q4-24 TTM COGS $34.3 $45.2 $57.1 $70.3 $206.9 Opex $58.0 $70.5 $92.4 $100.6 $321.5 BTC Mined 2,031 1,583 1,465 1,945 7,024 Break-even BTC Price $45,446 $73,089 $102,048 $87,866 $75,228 Source: Seeking Alpha, Author's estimates, COGS and Opex in millions This estimate includes SG&A and depreciation/amortization but does not include things like interest expense or revaluation of assets in addition to COGS. I like this approach better because I think it helps show which companies theoretically become bottom-line positive from operations the quickest in an environment where Bitcoin's price continues to rise. At a trailing twelve-month $75k break-even cost from operating, CleanSpark is one of the more efficient mining companies in the public markets and had the lowest SG&A as a percentage of revenue in Q4 compared to Riot Platforms ( RIOT ), MARA Holdings ( MARA ), and Core Scientific ( CORZ ). More importantly, CleanSpark is theoretically profitable at a $95k BTC price. Production Trend and Sat-Backing CleanSpark has continued to scale EH/s capacity over the last several months. As of March, the company had 42.4 EH/s in operating hashrate and is still guiding for 50 EH/s in H1 2025: Monthly Production (CleanSpark, Author's Chart) We've also seen CleanSpark show an ability to maintain monthly production, in part, due to the capacity growth. The company produced a nearly identical BTC-denominated return in Q1-25 as it did in Q4-24. Last quarter, the company mined 1,956 BTC, which was a slight QoQ increase from 1,945 in Q4-24. The company has been aggressively 'stacking sats' since mid-2023, and this can be reflected by CleanSpark's 'sats per share' figures each quarter: CleanSpark Sats Per Share (CleanSpark, Author's Chart) In my view, this metric can be useful in determining whether or not a company's shareholder dilution has been accretive to the investor or not. In the case of CLSK, the BTC per share is absolutely growing. Over the last year, CleanSpark's sat-backing per share has grown the fastest out of the roughly 12 stocks that I generally cover. Remember, this is 'sats per share' not raw BTC holdings. I've added Hut 8 ( HUT ) and HIVE Digital Technologies ( HIVE ) in addition to MARA and RIOT in the table below: Sats Per Share RIOT MARA HUT HIVE CLSK December 2023 3,190 6,250 16,188 1,845 1,617 December 2024 5,138 13,192 10,222 2,001 3,544 YoY Change 1,949 6,943 -5,966 155 1,927 Growth Percentage 61.09% 111.09% -36.86% 8.42% 119.12% Source: Company filings CleanSpark's sat-backing has been faster than even MARA's over the last year. What's interesting about both of these companies more than doubling the Bitcoin-backing of their common stock from Q4-23 to Q4-24 is the fact that the share prices of the stocks themselves have performed so badly: Data by YCharts Consider Bitcoin's price doubled from the end of 2023 to the end of 2024 while CLSK and MARA fell by 16.5% and 28.6% respectively. A big reason for this is likely that these companies were already pricing in 2024's growth at the end of 2023: Data by YCharts At the end of December 2023, CLSK was trading at 8 times trailing sales, with the stock at $12. More recently, the stock has been changing hands at $8 per share but at half the trailing sales multiple. Valuation Multiples Given the company has been aggressively scaling BTC holdings, it's important to consider the valuation of the company's Bitcoin relative to the market cap of the equity. This is especially true since the company is pivoting from a HODL-only treasury management approach to a more balanced capital management strategy. At the end of March, CleanSpark had roughly 11.9k BTC. At $95k BTC, the value of that stack is worth over $1.1 billion against an equity market cap of $2.4 billion: Bitcoin Treasuries CLSK trades at a little more than double the BTC held by the company and at a price to book valuation of just 1.19. Thinking again to price to sales, at a $100k Bitcoin price, CLSK trades at a forward multiple of slightly above 3: Market Capitalization $2.4 billion 3-Month Avg Production 652 FWD P/S At $85k BTC 3.61 FWD P/S At $100k BTC 3.07 FWD P/S At $150k BTC 2.05 FWD P/S At $200k BTC 1.54 Source: Author's Calculations While a 3x forward sales multiple isn't egregious, it is ahead of the info tech sector median of 2.5. Again, a large portion of that equity valuation comes from BTC that has already been mined. Ultimately, CLSK is still very much a play on BTC, both due to its corporate holdings of the asset as well as the company's operating results being reliant on mining it. Risks From where I sit, the biggest risk to a long position in CLSK is that the price of BTC goes down in a risk-off environment due to broader macro uncertainty. This would hit the company's equity valuation as well as the entire mining business model. The stock is also among the most-shorted equities in the public mining space, with over 32% of shares outstanding sold short as of April 15th: Data by YCharts While large shorting isn't necessarily a reason to take the other side of the trade just to be a contrarian, it does offer a baked-in buyer if the price of BTC decouples from equity markets in a risk-off scenario. In the event the price of BTC grows with global liquidity - as it has throughout its existence - it could provide a powerful short-covering rally in CLSK. But again, this is more of a trade than an investment thesis. Closing Takeaways Bitcoin mining is still a challenging business. Mining profitability following the halving has been poor, even when BTC prices eclipsed six figures. CleanSpark has an enormous level of exposure to the performance of BTC, both as a producer of the digital asset and as a major holder of it. At current BTC prices, the company should be at or close to positive net income, even without paper gains to BTC held by the company. I'm maintaining CLSK with a 'buy' rating on Bitcoin's recent price breakout .
