Institutional Perspective
Mark Palmer, analyst at Benchmark, stated in the latest report that Hut 8's transition to a digital infrastructure platform is progressing steadily. Palmer emphasized that the company's focus going forward will be execution and delivery, with 2026 being a pivotal year.
Financial Performance
Despite a net loss of $301.8 million in the fourth quarter primarily due to unrealized losses on digital assets, Hut 8's revenue nearly tripled year-over-year to $88.5 million. This growth was mainly driven by an increase in hash rate income.
Promising Long-Term Contracts
The 15-year, 245-megawatt IT lease agreement between Hut 8, River Bend, and Fluidstack has become a core reason for analyst optimism. This Google-backed agreement, valued at around $7 billion in base term value, has elevated the company's valuation toward infrastructure-like multiples.
Valuation Methodology
Benchmark's $85 price target is based on a sum-of-the-parts analysis. This includes the River Bend lease project, the probability-weighted valuation of an additional 1,000 megawatts under preferential tender rights, and the market value of Hut 8's holdings in American Bitcoin and its bitcoin reserves.