Cipher Digital's Sales Multiple Misleading Due to Decommissioned Mining Operations

Cipher Digital (CIFR) is a company that builds and operates turnkey data centers for hyperscalers. Recently, its stock has given back roughly a fifth of its value over the past month.

The sales multiple for Cipher Digital is high at 34.5 times sales, but this number is based on revenue from bitcoin mining at Black Pearl, which the company is deliberately shutting down. This revenue will be replaced by contracted data center income in the future.

The company's trailing-twelve-month revenue of about $200 million is deeply negative at -206.2%, compared to 18.4% for the S&P 500. The operating margin is heavily impacted by higher stock-based compensation, payroll taxes tied to equity vesting, and team investment for the contracted portfolio.

Cipher Digital has executed three campus leases that are expected to generate approximately $793 million of average annualized net operating income from October 2026 through September 2036. The company's debt is high at 84.8% of market value, and it has $6 billion in corporate and project debt outstanding, set against $870 million of unrestricted liquidity.