BTIG analyst Gregory Lewis counts three reasons why the demand for microgrids is approaching an inflection point: 1) the combination of increasing demand for electricity security, 2) improved microgrid economics as the costs of energy storage systems and solar have improved, and 3) energy cost optimization as electricity prices become volatile owing to the intermittency of renewables.
A company offering integrated microgrid solutions such as Cleanspark (CLSK), says Lewis, is well-positioned to benefit.
Cleanspark’s solution encompasses everything from the design and construction of microgrids, to support and maintenance (largely software).
The company has been focused on growth and raised $40 million last October to make several acquisitions. In February, Cleanspark added commercial/residential solar and energy storage developer Solar Watt Solutions to its roster, in a deal worth roughly $4 million in cash and 500,000 CLSK shares. The deal followed last July’s acquisition of GridFabric and the December addition of ATL Data Centers.
The last one is important; due to ATL being a Bitcoin miner, the purchase has added another dimension to Cleanspark. The company got its hands on ATL’s 3,471 Bitcoin mining rigs, a timely addition, considering the surging Bitcoin price. Mining is a prosperous business right now, and in the near-term, Cleanspark plans to scale up its mining efforts.
Although Lewis sees the Bitcoin business as secondary, it has the potential to power other ventures.
“As the core of the business is microgrid solutions, we would not be surprised to see CLSK monetize the Bitcoin mining business longer-term. Bottom line,” Lewis summed up, “We are bullish on CLSK as a way to invest in increasing demand for microgrids.”
Along with the soaring Bitcoin price, shares of CLSK have ripped higher. Over the past 12 months, the stock is up by 2320% But would you believe it has even further to run? Lewis does.
Lewis rates CLSK a Buy along with a $45 price target. The implication for investors? Upside of 55%. (To watch Lewis’ track record, click here)
Lewis is only the second analyst to take notice of the microgrid specialist. Both, however, are bullish. With the additional Buy in tow, the stock has a Moderate Buy consensus rating, backed by a $47.5 average price target. Gains of 54% could be in the cards, should the target be met over the next 12 months. (See CLSK stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.