IREN's 8.26X P/B Suggests Stretched Valuation: Hold or Fold the Stock?

IREN Limited IREN shares are overvalued, as suggested by the Value Score of F. In terms of forward price/book, IREN Limited is trading at 8.26X compared with the Zacks Financial Miscellaneous Services industry’s 3.53X and the Zacks Finance sector’s 4.25X. IREN shares are trading at a higher multiple compared with CleanSpark’s CLSK 2.46X and Riot Platforms’ RIOT 2.32X.

IREN Stock’s Valuation

IREN has been benefiting from growing revenues, which jumped 29.4% sequentially to $187.3 million in the fourth quarter of fiscal 2025. The company mined 1,825 bitcoins in the fourth quarter of fiscal 2025, and the average revenue per bitcoin mined was $98.8. Bitcoin revenues were $180.3 million, up 27.7% sequentially. IREN’s best-in-class fleet efficiency at 15 joules per terahash and low net power costs of 3.5 cents per kilowatt hour in the fiscal fourth quarter benefited the bitcoin business.

AI Cloud revenues are accelerating, which bodes well for IREN Limited. In the fourth quarter of fiscal 2025, AI Cloud services revenues were $7 million compared with $3.6 million in the previous quarter. IREN’s AI cloud business is expanding rapidly, with more than 10,000 GPUs online or set to be commissioned in the coming months. The upcoming GPUs include next-generation liquid-cooled GB300 NVL72 systems from NVIDIA NVDA at the Prince George campus. Meanwhile, IREN has achieved NVIDIA Preferred Partner status.

These factors have helped IREN Limited shares jump 462.1% year to date, outperforming the sector’s return of 13.2% and the Zacks Financial Miscellaneous Services industry’s appreciation of 2.6%. IREN Limited has outperformed peers, including Riot Platforms and CleanSpark. Shares of Riot Platforms and CleanSpark have returned 102.5% and 103.8%, respectively.

IREN Stock’s YTD Performance

Technically, IREN is trading above the 50-day and 200-day SMAs, suggesting a bullish trend.

IREN Trades Above 50-Day and 200-Day SMAs

So, what should investors do with IREN stock? Let’s dig deep into its fundamentals to gain some insight.

IREN’s Prospects Ride on Growing Bitcoin Revenues

IREN Limited is one of the world’s largest and lowest-cost bitcoin miners. It achieved its 50 EH/s installed hashrate target in June. 50 EH/s generates roughly $830 million annualized hardware profit. 

IREN is on track to achieve $1.25 billion in annualized revenues, with roughly $1 billion coming from bitcoin mining, and $200-$250 million from AI Cloud (by December 2025). IREN expects to scale from 1.9k to 10.9k GPUs in the coming months. This includes 1.9k air-cooled H100 and H200s, 7.8k air-cooled B200 and B300s, and 1.2k liquid-cooled GB300s.

IREN has been on track to install more than 60k NVIDIA Blackwell GPUs at British Columbia sites and recognizes the potential of 19k GB300s at Horizon 1. IREN continues its transition in British Columbia (160 MW) from bitcoin mining to AI, including a new liquid-cooled data center for GB300 NVL72 installations at Prince George. 

IREN now expects to achieve $500 million in AI Cloud annualized run-rate revenue (ARR) by the first quarter of fiscal 2026. On Oct. 7, IREN inked an additional multi-year cloud services contract with leading AI companies for NVIDIA Blackwell GPU deployments.

Strong Liquidity Boosts IREN’s Growth Trajectory

IREN had $564.5 million in cash and cash equivalents as of June 30, 2025. The company, through a combination of existing cash, cash flows from operations and GPU finance, expects to fully fund expansion to 10.9k GPUs, complete Horizon 1 and energize Sweetwater 1 substations.

The company has secured two tranches of financing, which have funded 100% of the purchase price ($200 million) of new GPUs at the single-digit rates with a favorable 24-36-month term.

IREN closed its $1 billion convertible notes offering last week with net proceeds of $979 million.

IREN’s Earnings Estimate Revision Shows Downward Trend

The Zacks Consensus Estimate for first-quarter fiscal 2026 earnings is currently pegged at 17 cents, down by a penny over the past 30 days. The consensus mark for revenues is pegged at $236.7 million compared with the year-ago quarter figure of $54.4 million.
 

IREN Limited Price and Consensus

IREN Limited price-consensus-chart | IREN Limited Quote

The Zacks Consensus Estimate for fiscal 2026 earnings is currently pegged at 70 cents per share, down 35.2% over the past 30 days. The consensus mark for revenues is pegged at $1.13 billion, suggesting a jump of 122.3% from fiscal 2024’s reported figure.

Here’s Why IREN Stock is Best to Avoid

Despite strong prospects from low-cost bitcoin mining and expanding AI Cloud footprint, modest earnings growth and stretched valuation are risky for investors. A challenging macroeconomic environment with uncertainties related to tariffs doesn’t bode well for investors.

IREN Limited currently has a Zacks Rank #4 (Sell), which implies investors should avoid the stock for the time being. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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