TenQ

The Cipher Digital story

Cipher Digital is shifting from bitcoin mining to high-performance computing data centers, with the central question of whether Amazon and Fluidstack leases can turn its construction pipeline into rent that covers development costs and debt.

Cipher Digital stock reportTenQ Score 7/36 · every chart and check from its filings
  • $8.98share price, last close
  • $3.7Bmarket value
  • 7/36TenQ Score checks passed

The story in brief

  • Rent has begun. Black Pearl delivered its first computing capacity in August 2026, two months ahead of schedule, and rent commenced under its Amazon Web Services lease.
  • Longer contracts, higher costs. September 2026 agreements extended Barber Lake’s contracted duration to 20 years and revenue to over $9 billion, while assigning Cipher the first $359.3 million of costs above the initial budget.
  • Financing remains central. Stingray’s bond offering funded development through substantial completion, but Cipher reported total debt of $5.5 billion and free cash flow of -$1.5 billion over the last twelve months.

What drives the business

  • Cipher has evolved from a bitcoin miner into a data center developer and operator that sources land and power, oversees construction, and leases facilities to large computing customers, while retaining bitcoin mining at its 207 MW Odessa facility.
  • Amazon Web Services signed a 15-year lease for approximately 300 MW at Black Pearl, where mining ceased in February 2026 and the first computing capacity began generating rent in August 2026.
  • Fluidstack leased the entire 300 MW Barber Lake site with Google backing certain obligations, and September 2026 agreements added a binding commitment from an unnamed leading AI lab for an additional 10-year term, bringing total contracted revenue to over $9 billion.
  • Project financing supports construction, with Stingray’s completed bond offering fully funding development through substantial completion and reimbursing $56.7 million of previously funded project expenditures.
  • The August 2026 update added an option for Apollo near San Antonio with up to 900 MW of potential capacity, expanding the pipeline without yet establishing an operating facility.

What the price assumes

At $15.50, the reverse DCF cannot measure an implied growth rate because free cash flow and operating earnings are both negative, leaving the price dependent on future profits.

The 33.7x price to sales ratio is above the TenQ check’s under 2.5x bar, and Cipher passes 0 of 6 Value checks.

Revenue reached $191 million over the last twelve months, growing 20.3% compared with a 319.3% annual pace over the last three years, but the operating margin remained -278.1%.

What could change the story

  • Cash and short-term investments of $832 million sit against $5.5 billion of total debt and free cash flow of -$1.5 billion over the last twelve months, with Cipher passing 1 of 6 Financial health checks.
  • At Barber Lake, Cipher bears the first $359.3 million above the initial budget, while the tenant reimburses 50% of costs beyond that amount through additional rent over the aggregate twenty-year term rather than immediately.
  • Completion guarantees for Black Pearl and Stingray require Cipher to fund construction shortfalls if bond proceeds prove insufficient, so project financing does not eliminate corporate exposure.
  • Delayed grid connections, transmission access, contractor work, or specialized equipment could raise costs, postpone delivery, and potentially breach lease obligations.
  • Community opposition and changes in government rules could impose stricter requirements, development moratoria, or land use restrictions that delay or prevent projects.

What to watch next

  • Management’s August 2026 update called for significant additional progress in the third quarter of 2026 as Cipher pursued new sites and signed new deals, making completed agreements more informative than site options alone.
  • The revised September 2026 Barber Lake schedule calls for phased deliveries from the fourth quarter of 2026 through the first quarter of 2027, with first rent expected in the fourth quarter of 2026.
  • Subsequent releases can show how much Black Pearl rent contributes to revenue and whether operating cash flow and free cash flow improve as additional capacity enters service.
  • Construction spending, remaining funding needs, and Barber Lake costs above budget will show whether funded projects stay within their financing arrangements.

Sources

Back to the CIFR report