CoreWeave Stock To $56?
CoreWeave (CRWV) stock has fallen 19% during the past day, and is currently trading at $79.56. Our multi-factor assessment suggests that it may be time to reduce exposure to CRWV stock. We are primarily concerned current valuation and a price of $56 may not be out of reach. We believe there is not much to fear in CRWV stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive.
Below is our assessment:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | Very High |
| What you get: | |
| Growth | Very Strong |
| Profitability | Weak |
| Financial Stability | Strong |
| Downturn Resilience | N/A |
| Operating Performance | Strong |
| Stock Opinion | Relatively Expensive |
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Let’s get into details of each of the assessed factors but before that, for quick background: With $40 Bil in market cap, CoreWeave provides a cloud platform with proprietary software and services to manage complex AI infrastructure at scale, driving the AI revolution and powering innovation intelligence.
[1] Valuation Looks Very High
| CRWV | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 9.2 | 3.4 |
| Price-to-Earnings Ratio | -51.5 | 25.2 |
| Price-to-Free Cash Flow Ratio | -4.9 | 21.3 |
This table highlights how CRWV is valued vs broader market.
[2] Growth Is Very Strong
- CoreWeave has seen its top line grow at an average rate of 235.4% over the last 3 years
- Its revenues have grown 235% from $1.3 Bil to $4.3 Bil in the last 12 months
- Also, its quarterly revenues grew 133.7% to $1.4 Bil in the most recent quarter from $584 Mil a year ago.
| CRWV | S&P 500 | |
|---|---|---|
| 3-Year Average | 235.4% | 5.6% |
| Latest Twelve Months* | 235.4% | 6.4% |
| Most Recent Quarter (YoY)* | 133.7% | 7.5% |
This table highlights how CRWV is growing vs broader market.
[3] Profitability Appears Weak
- CRWV last 12 month operating income was $156 Mil representing operating margin of 3.6%
- With cash flow margin of 39.1%, it generated nearly $1.7 Bil in operating cash flow over this period
- For the same period, CRWV generated nearly $-767 Mil in net income, suggesting net margin of about -17.8%
| CRWV | S&P 500 | |
|---|---|---|
| Current Operating Margin | 3.6% | 18.8% |
| Current OCF Margin | 39.1% | 20.7% |
| Current Net Income Margin | -17.8% | 12.9% |
This table highlights how CRWV profitability vs broader market.
[4] Financial Stability Looks Strong
- CRWV Debt was $19 Bil at the end of the most recent quarter, while its current Market Cap is $40 Bil. This implies Debt-to-Equity Ratio of 47.6%
- CRWV Cash (including cash equivalents) makes up $1.9 Bil of $33 Bil in total Assets. This yields a Cash-to-Assets Ratio of 5.9%
| CRWV | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 47.6% | 19.9% |
| Current Cash-to-Assets Ratio | 5.9% | 7.3% |
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