Discounted Cash Flow Calculation for TSX:HUT using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
Hut 8 Mining
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
Note: Free cash flow to equity valuations ignore the company's cash or debt.
TSX:HUT DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
Hut 8 Mining
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
Hut 8 Mining
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Hut 8 Mining's share price is below the future cash flow value, and at a moderate discount (> 20%).
Hut 8 Mining's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
Hut 8 Mining's
is considered below, and whether this is a fair price.
Price based on past earnings
Hut 8 Mining's earnings available for a low price, and how does
this compare to other companies in the same industry?
In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Hut 8 Mining has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.
This is quite a rare situation as 97% of companies covered by Simply Wall St do have past financial data. You can see them here.
Show me the analysis anyway
The future performance of a company is measured in the same way as past
performance, by looking at estimated
and how much profit it is expected to make.
Future estimates come from
professional analysts. Just like forecasting the weather, they don’t always get
Expected IT industry annual growth in earnings.
Earnings growth vs Low Risk Savings
Hut 8 Mining
expected to grow at an
Unable to compare Hut 8 Mining's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare Hut 8 Mining's earnings growth to the Canada market average as no estimate data is available.
Unable to compare Hut 8 Mining's revenue growth to the Canada market average as no estimate data is available.
Unable to determine if Hut 8 Mining is high growth as no earnings estimate data is available.
Unable to determine if Hut 8 Mining is high growth as no revenue estimate data is available.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Hut 8 Mining's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
Hut 8 Mining
has a total score of
0/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Andrew Kiguel has been President, Chief Executive Officer and a Director of Hut 8 Mining Corp. since April 2, 2018. Mr. Kiguel joins Hut 8 from GMP Securities L.P., where he played an integral role for more than 18 years in the Real Estate and Retail Capital Markets groups. Mr. Kiguel served as Managing Director of Investment Banking at GMP Securities L.P. Mr. Kiguel served as Senior Vice President of GMP Securities L.P. a subsidiary of GMP Capital Trust. Mr. Kiguel served as Vice President of Investment Banking of GMP Securities L.P. He joined GMP in January 2000, and is an integral member of Toronto’s investment banking department having worked on numerous corporate financings and advisory transactions. Mr. Kiguel also worked on and presented several Valuations and Fairness Opinions for public companies. Prior to joining GMP, he served as credit analyst for a top tier U.S. investment bank in Canada where he managed a portfolio of loans and analyzed the viability of numerous corporate and investment banking transactions. Mr. Kiguel has extensive experience in providing investment banking services to numerous public and private entities, including raising equity and debt capital in excess of C$3 billion over the last five years. He has also worked in an advisory role on numerous marquee M&A transactions.
Insufficient data for Andrew to compare compensation growth.
Andrew's remuneration is higher than average for companies of similar size in Canada.
Management Team Tenure
Average tenure of the
Hut 8 Mining
management team in years:
The average tenure for the Hut 8 Mining management team is less than 2 years, this suggests a new team.
Chief Financial Officer
VP of Communications
Head of Power
Board of Directors Tenure
Average tenure and age of the
Hut 8 Mining
board of directors in years:
The average tenure for the Hut 8 Mining board of directors is less than 3 years, this suggests a new board.
Board of Directors
Who owns this company?
Recent Insider Trading
No 3 month open market individual insider trading information.
Hut 8 Mining Corp. operates as a cryptocurrency mining company in Canada. The company engages in industrial scale bitcoin mining operations. It also owns and operates nine Blockbox AC data centers. The company is headquartered in Toronto, Canada.
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