IREN Stock Falls 11% on Q2 Earnings Miss and Revenue Shortfall

TLDR

• IREN stock dropped 11.5% to $39.79 after reporting Q2 EPS loss of ($0.52) versus ($0.07) expected and revenue of $184.7M versus $229.6M consensus.
• Trading volume jumped 35% to 60.4M shares as the company posted Q2 net income loss of ($155.4M) compared to $384.6M profit last quarter.
• Analysts maintain “Moderate Buy” rating with $69.36 average price target despite the earnings miss.
• The potential Microsoft AI partnership remains a key catalyst that could drive the stock higher if execution improves.
• Stock volatility is linked to Bitcoin price movements and new inverse ETF listings that increase short-term trading risk.

IREN stock tumbled 11.5% Thursday after the company delivered disappointing second-quarter results that fell well short of Wall Street expectations. The stock closed at $39.79, down from the previous close of $44.94.

The company reported an earnings per share loss of ($0.52) for the quarter. Analysts had expected a loss of just ($0.07). That’s a miss of ($0.45) per share.

Revenue came in at $184.7 million. The Street was looking for $229.6 million. That represents a revenue miss of roughly $45 million.

IREN Limited, IREN

Trading volume spiked 35% to 60.4 million shares. That’s well above the average daily volume of 44.8 million shares. The stock hit an intraday low of $38.90 during the selloff.

Microsoft AI Partnership Remains Key Focus

The company’s net income swung to a loss of ($155.4M) in Q2. Last quarter, IREN posted a profit of $384.6 million. That’s a $540 million swing in quarterly profitability.

Co-CEO Daniel Roberts highlighted the company’s progress on capacity expansion. He pointed to more than 4.5 gigawatts of secured power. The company is targeting $3.4 billion in annual recurring revenue.

Analysts are watching the potential Microsoft AI deal closely. If that partnership scales up, it could serve as a major upside driver. Execution on this front will be critical for investor sentiment.

Wall Street hasn’t given up on the stock. Thirteen analysts rate IREN a buy. Five have hold ratings and one has a sell rating. The consensus rating is “Moderate Buy” with an average price target of $69.36.

Bitcoin Correlation and Trading Volatility

The stock’s performance is tied to Bitcoin price movements. When crypto weakened recently, IREN followed. This correlation adds another layer of risk for investors.

New inverse ETF instruments now track IREN. The Tradr 2X Short Iren Daily ETF provides listed short exposure. This increases trading activity and can amplify volatility swings.

Some retail traders flagged the pre-earnings drop as potential market manipulation. The stock dove 14% ahead of the earnings release. This highlights the elevated short-term trading risk around the name.

Institutional investors have been active. Hood River Capital Management picked up a new stake worth $74.2 million in Q2. Situational Awareness LP boosted its position by 90.1% to 6.4 million shares worth $93.3 million.

Voloridge Investment Management increased its stake by 1,444.5%. Marshall Wace LLP raised its holdings by 247.7% to 2 million shares valued at $95.4 million. Hedge funds and institutions now own 41.08% of the company’s stock.

The company maintains a debt-to-equity ratio of 0.34. Its current ratio stands at 5.52. Market cap is $11.28 billion with a P/E ratio of 20.51 and a beta of 4.27.

Citigroup initiated coverage with an outperform rating in November. Roth MKM set a $94 price target with a buy rating. Citizens JMP issued a market outperform rating with an $80 target.

The stock’s 50-day moving average is $46.78. Its 200-day moving average sits at $42.27. IREN reported a negative return on equity of 3.60% but maintained a net margin of 86.96%.

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