In a research update released on October 2, Rosenblatt Securities reaffirmed its Buy rating for TeraWulf (WULF) and increased its 12-month price target from $12.00 to $14.50. The firm attributes this adjustment to what they perceive as an overlooked HPC hosting pipeline.
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Rosenblatt forecasts a substantial increase in TeraWulf’s revenue, predicting it will grow from $183.1 million in 2025 to $923.3 million by 2027. Furthermore, adjusted EBITDA is anticipated to recover from a minor loss of $1.7 million in 2025 to a significant $531.9 million by 2027. The firm’s new target suggests a valuation of 16 times the estimated EBITDA for 2027, reflecting a modest premium compared to peers, thanks to WULF’s rapid expansion in high-value HPC services.
The report points out TeraWulf’s recent acquisition of 400 MW capacity from Lake Cayuga as an indication of its growing capabilities. However, it mentions that TeraWulf has not yet publicly announced additional locations. The lack of such disclosures is viewed as an indication of a thriving pipeline, with TeraWulf well-equipped to acquire 150–200 MW of new HPC hosting contracts on an annual basis.
Comparing WULF’s performance to its competitors, which gained 44% over the past month compared to WULF’s 21% rise, Rosenblatt believes the recent price stagnation presents a buying opportunity considering the ongoing surge in multi-billion-dollar HPC contracts within the industry. They argue that while the anticipated expansions are already factored into competitors’ valuations, TeraWulf remains undervalued.
In terms of valuation metrics, the report highlighted TeraWulf’s 2025 EV/Revenue ratio at 17.7x, which is expected to decrease to 3.5x by 2027, alongside an EV/EBITDA ratio improving from an extreme negative to 6.1x in 2027. These significant declines in multiples, according to Rosenblatt, indicate the company’s shift towards profitability and warrant a premium valuation based on future earnings.
Moreover, Rosenblatt has revised its revenue projections for 2026 and 2027 upwards, reflecting bolstered confidence in TeraWulf’s capacity to generate revenue from its Bitcoin mining infrastructure for HPC colocation purposes. They stress that the rising demand in AI, combined with TeraWulf’s ability to support both mining operations and HPC clusters, is likely to result in considerable upside potential.
As of Thursday, WULF’s closing price was $11.58, significantly below Rosenblatt’s target of $14.50, indicating a potential upside of 25%. The note from the research firm highlights several key risks, such as possible regulatory changes, dilution from financing, and fluctuations in energy costs. However, it firmly maintains that the market has underestimated TeraWulf’s growth potential and its capabilities in HPC hosting.
Read More: JonesResearch reiterates buy on TeraWulf, raises 2027 EBITDA to $547 million on Fluidstack deal
At the time of writing, WULF had increased by 1% since yesterday’s close.
