CleanSpark (NASDAQ:CLSK), one of the largest Bitcoin mining companies in the US, was among the top gainers on Monday, with its stock price surging 15%.
There was a clear catalyst for CleanSpark’s rise, as Monday was the first day it traded on the S&P Smallcap 600 Value index.
“CleanSpark’s inclusion in the S&P SmallCap 600 index is another significant milestone for our employees, investors and management team, and is an important recognition of our consistent performance,” Zach Bradford, CEO of CleanSpark, said. “Our inclusion enhances visibility within the investment community and gives us an opportunity to demonstrate the value of being a pure play, vertically integrated Bitcoin mining company and making exposure to our model more broadly available.”
Along with CleanSpark, several other stocks were added to the SmallCap 600, including Ryman Hospitality Properties (NYSE:RHP), Element Solutions (NYSE:ESI), Freshpet (NASDAQ:FRPT), WillScot Holdings Corp. (NASDAQ:WSC), Mueller Water Products (NYSE:MWA), and Kratos Defense & Security Solutions (NASDAQ:KTOS).
They replace Wabash National (NYSE:WNC), Green Dot (NYSE:GDOT), Fulgent Genetics (NASDAQ:FLGT), Nabors Industries (NYSE:NBR), Green Plains (NASDAQ:GPRE), Mativ Holdings (NYSE:MATV) and Hain Celestial Group (NASDAQ:HAIN).
The SmallCap 600 is an important small-cap benchmark, as it has specific screens that seek out companies that are liquid and financially viable. Companies must have positive earnings in the most recent quarter and over the past four quarters and adequate trading volume.
The index includes stocks with market caps of $1.1 billion to $7.4 billion, and it has balanced sector representation. As such, the stocks are generally on the larger end of the small-cap universe and are more stable than many stocks in the broader small-cap universe.
Analysts See Huge Upside for Cleanspark Stock
The inclusion in this index should boost its profile among investors, especially as it is now included in various ETFs that track the index, including the Vanguard S&P Small-Cap 600 Index (NYSE:VIOO).
Monday’s surge provided a nice lift for CleanSpark stock, which is down about 7% year-to-date, trading at around $8.60 per share. It is down some 56% over the past 12 months.
The company is coming off a quarter where is saw revenue increase by 120% to $162 million and earnings rose to 85 cents per share from 14 cents per share in the same quarter a year ago.
That strong quarter threw its P/E out of whack, as it stands at 121, but it has a forward P/E of 6.70.
But analysts are bullish on CleanSpark as it a major supplier for data centers, which should spur growth. It also is among the leaders in several key areas, including Bitcoin production, Bitcoin holdings, deployed hash rate, fleet efficiency, and operational uptime, according to HC Wainwright, as reported by Investing.com. A more favorable regulatory environment should also help Bitcoin miners like CleanSpark.
Wainwright recently set a $27 per share price target for CleanSpark, which would be more than triple its current price. Analysts have a median price target of $20 per share, which would be a 135% upside.