Hut 8 Corp. (NASDAQ: HUT)

Sector: Financial Services Industry: Capital Markets CIK: 0001964789
Market Cap 4.30 Bn
P/B 2.98
P/E 20.91
P/S 24.13
ROIC (Qtr) 16.53
Div Yield % 0.00
Rev 1y % (Qtr) 90.95
Total Debt (Qtr) 390.65 Mn
Debt/Equity (Qtr) 0.27

About

Price action

Investment thesis

Bull case

  • Strong tangible asset base of 2.47B provides 6.32x coverage of total debt 390.65M, indicating robust asset backing and low credit risk.
  • Tangible assets of 2.47B provide exceptional 1259.39x coverage of deferred revenue 1.96M, showing strong service capability backing.
  • Cash position of 39.63M provides exceptional 13209.67x coverage of minority interest expenses 3000, indicating strong liquidity.
  • Retained earnings of 285.16M provide full 1.14x coverage of long-term debt 249.96M, indicating strong internal capital position.
  • Tangible assets of 2.47B provide robust 23.01x coverage of other current liabilities 107.31M, indicating strong asset backing.

Bear case

  • Operating cash flow of (103.51M) barely covers its investment activities of (579.61M), with a coverage ratio of 0.18, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of (103.51M) provides insufficient coverage of deferred revenue obligations of 1.96M, which is -52.78x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (103.51M) shows concerning coverage of stock compensation expenses of 22.09M, with a -4.69 ratio indicating potential earnings quality issues.
  • Free cash flow of (283.17M) provides weak coverage of capital expenditures of 179.67M, with a -1.58 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of (103.51M) provides minimal -0.76x coverage of tax expenses of 136.87M, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Capital Markets
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GS Goldman Sachs Group Inc 284.23 Bn 17.94 4.84 911.32 Bn
2 MS Morgan Stanley 279.63 Bn 17.97 4.05 353.12 Bn
3 SCHW Schwab Charles Corp 179.33 Bn 23.09 7.83 27.59 Bn
4 HOOD Robinhood Markets, Inc. 106.92 Bn 48.73 25.43 0.00 Bn
5 CRCL Circle Internet Group, Inc. 40.97 Bn 261.00 24.22 0.15 Bn
6 IBKR Interactive Brokers Group, Inc. 28.23 Bn 30.79 4.75 28.43 Bn
7 LPLA LPL Financial Holdings Inc. 27.60 Bn 33.13 1.77 7.52 Bn
8 FUTU Futu Holdings Ltd 22.89 Bn 18.13 8.54 1.75 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.65 1.07
EV to Cash from Ops. EV/CFO -42.92 15.33
EV to Debt EV to Debt 11.37 21.89
EV to EBIT EV/EBIT 11.79 -0.80
EV to EBITDA EV/EBITDA 9.33 11.20
EV to Free Cash Flow [EV/FCF] EV/FCF -15.69 43.08
EV to Market Cap EV to Market Cap 1.03 -0.05
EV to Revenue EV/Rev 24.91 12.82
Price to Book Value [P/B] P/B 2.98 3.09
Price to Earnings [P/E] P/E 20.91 6.20
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 4.22
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 10.37
Dividend per Basic Share Div per Share (Qtr) 0.00 0.70
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -8.68
Interest Coverage Int. cover (Qtr) 11.06 37.53
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -48.22 -12,429.64
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -45.65 1,588.78
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 4.88
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 4.67 270.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 105.61 333.57
EBIT Growth (1y) % EBIT 1y % (Qtr) 72.04 3,103.22
EBT Growth (1y) % EBT 1y % (Qtr) 77.77 3,039.53
EPS Growth (1y) % EPS 1y % (Qtr) -10.21 24.25
FCF Growth (1y) % FCF 1y % (Qtr) -49.10 -80.08
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 3.52 51.33
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.07 0.42
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.08
Cash Ratio Cash Ratio (Qtr) 0.13 2.01
Current Ratio Curr Ratio (Qtr) 0.72 3.47
Debt to Equity Ratio Debt/Equity (Qtr) 0.27 1.46
Interest Cover Ratio Int Coverage (Qtr) 11.06 37.53
Times Interest Earned Times Interest Earned (Qtr) 11.06 37.53
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 257.00 76.68
EBIT Margin % EBIT Margin % (Qtr) 211.24 46.81
EBT Margin % EBT Margin % (Qtr) 192.14 58.57
Gross Margin % Gross Margin % (Qtr) 47.80 53.60
Net Profit Margin % Net Margin % (Qtr) 115.40 29.41