QS Research · Michael Burry's Scion Capital analyst template · 2006
Cipher Digital Inc. (CIFR)
As of 2026-11-09 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case -1% · downside -72% · upside +263%
The market is not missing the HPC story: CIFR already trades at 54.01x TTM EV/Sales [S1], the highest multiple in its peer table, on $146.1M TTM revenue [N10] while TTM EBIT is -$565.6M [N11] and free cash flow is -$3.08B [N17]. Using today's 54.01x EV/Sales and $4.94B net debt (debt $5.56B + leases $37.0M - cash $656.0M) [N20,N21,N19], the TTM revenue base supports about $6.46/share (-1.2%), annualizing Q3 2026 revenue of $26.7M gives $106.8M revenue and about $1.82/share (-72.3%), and doubling TTM revenue to $292.2M gives about $23.75/share (+263.1%). The downside severity blocks a long under the rule, while the base is not negative enough for a short, so the call is watch until a dated delivery/rent catalyst makes the upside or downside path clearer. No re-rate is assumed; all three cases use today's 54.01x EV/Sales.
Key numbers
- Share price: $6.54
- Market cap: $2.99B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $146.1M
- Price / book: 4.98x
The 15 boxes
- ✓ 1. Long-form business notes
Cipher Digital is a former blank-check company (Good Works Acquisition Corp., formed June 24, 2020) that became a bitcoin miner and, by the FY2025 10-K, describes itself as a vertically integrated HPC data center developer with 4.2 GW across 10 sites, 600 MW of HPC build under two hyperscaler leases and ~207 MW of mining at Odessa. Revenue is still entirely bitcoin mining through the end of 2025 ($3.0M FY2022, $126.8M FY2023, $151.3M FY2024, $223.9M FY2025), while operating losses widened to -$421.6M and net income to -$822.2M in FY2025, with -$207.9M operating cash flow against $487.9M capex. The HPC leases (Fluidstack/Barber Lake with a Google backstop; 15-year Amazon lease at Black Pearl) and the 3.4 GW pipeline are the future revenue base, funded in 2025 by ~$3.2B of gross convertible and senior secured notes proceeds and a stated preference for project-level, non-recourse debt.
- ✓ 2. Competitive advantage
The record shows no durable advantage: Cipher lost money at the operating line in every year from FY2022 to FY2025 (-$37.4M, -$20.1M, -$43.7M, -$421.6M) and burned operating cash in all four years, while revenue scaled from $3.0M (FY2022) to $223.9M (FY2025). What it sells today is hashrate to mining pools at Odessa and Black Pearl, priced by the network with its largest cost being electricity, and it names rising competition from bitcoin miners and from HPC data center entrants over power. The only edge it claims is a forward-looking one - HPC hosting described as 'expected stable, long-term and high margin revenue' - which is unearned so far, concentrated in single-tenant leases with Amazon and Fluidstack (Google backstop on the Fluidstack lease) and gated on construction it has not yet finished.
- ✓ 3. 10-Q takeaways
Q3 2026 revenue fell to $26.7 million from $71.7 million a year earlier, but for the first time it included HPC leasing revenue of $5.9 million from the initial phase of the Black Pearl lease (August 2026); bitcoin mining revenue dropped $50.9 million after mining ended at Black Pearl in February 2026. The quarter's $31.6 million of net income is a warrant-revaluation artifact, not operating profit: the operating loss was $71.9 million and the earnings release reports Q3 2026 Adjusted EBITDA of negative $10 million. Nine months to September 30, 2026 show a $350.2 million net loss, $283.2 million of operating cash burn and $2,352.9 million of investing cash use, funded by debt and ATM equity. Subsequent to quarter-end the company equitized roughly $165.9 million of 2030 convertible notes and issued $850.0 million of 2032 zero-coupon converts.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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