Investment Thesis
TeraWulf exhibits catastrophic fundamental deterioration with negative stockholders equity (-$78.8M), operating losses of -$162.1M despite $34M revenue, and negative free cash flow of -$540.5M. Despite maintaining 60.1% gross margins and $2.6B cash, the company cannot service $3.1B debt from operations, burning capital at unsustainable rates with $523M CapEx unable to generate positive operating returns.
Strengths
- Strong gross margin of 60.1% indicates core business economics are viable at unit level
- Substantial cash position of $2.6B provides 4-5 year liquidity runway at current burn rates
- Revenue growth of 11.2% YoY shows market demand exists for services
Risks
- Negative stockholders equity of -$78.8M represents technical insolvency on book value basis
- Operating cash flow is negative (-$17.6M); company cannot fund operations or debt service from business
- Free cash flow of -$540.5M with $523M annual CapEx indicates capital intensity is destroying shareholder value
- Interest coverage of -14.7x; company cannot service $3.1B debt from operations
- Operating margin of -476.7% shows SG&A and other costs are grossly misaligned with revenue
Key Metrics to Watch
- Operating cash flow inflection - must turn positive to avoid insolvency
- Cash burn rate trajectory - at -$540.5M FCF, cash runway is finite
- Operating leverage from CapEx - must demonstrate asset ROI improvement
- Debt refinancing capacity - ability to service or restructure $3.1B at current operating performance
Financial Metrics
Revenue
34.0M
Net Income
-427.6M
EPS (Diluted)
$-1.01
Free Cash Flow
-540.5M
Total Assets
7.0B
Cash
2.6B
Profitability Ratios
Gross Margin
60.1%
Operating Margin
-476.7%
Net Margin
-1,257.3%
ROE
N/A
ROA
-6.1%
FCF Margin
-1,589.3%
Balance Sheet & Liquidity
Current Ratio
1.20x
Quick Ratio
1.20x
Debt/Equity
N/A
Debt/Assets
101.1%
Interest Coverage
-14.68x
Long-term Debt
3.1B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-10T07:54:25.599445 |
Data as of: 2026-03-31 |
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