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In terms of the 12-month price/sales (P/S), WULF is trading at 18.24X, significantly higher than the Zacks Financial- Miscellaneous Services industry and the Zacks Finance sector’s 3.23X and 8.9X, respectively.
At such a high valuation, the question arises whether WULF stock is still a worthy investment, or is it a good time to consider taking profits? Let's take a closer look.
Price/Sales Ratio (F12M)
Image Source: Zacks Investment Research
Over the past month, WULF shares have fallen 4.9%, underperforming the Zacks Finance sector’s gain of 2.4% and the S&P 500’s return of 0.7%.
Market volatility has had a major impact on Bitcoin mining operations, directly weighing on TeraWulf's stock performance and affecting near-term stability. Other alternative crypto stocks, such as Riot Platforms (RIOT - Free Report) , CleanSpark (CLSK - Free Report) and Marathon Digital (MARA - Free Report) , are also being impacted by the market volatility. In the past month, CleanSpark, Riot Platforms and Marathon Digital have recorded declines of 19.1%, 25.2% and 35.3%, respectively.
RIOT is expanding U.S. mining capacity post-halving, CLSK is emphasizing low-cost, energy-efficient operations, and MARA is rapidly scaling hash-rate leadership — all directly comparable to WULF in the current bitcoin-mining landscape.
1-Month Share Price Performance
Image Source: Zacks Investment Research
Heavy Debt Burden Emerges as a Major Strategic Risk for WULF
TeraWulf’s long-term financial position has become increasingly strained as aggressive funding for its HPC (High Performance Computing) expansion has led to a significant buildup of debt. As of Sept. 30, 2025, the company held $2.2 billion in total liabilities against $2.5 billion in assets, driven largely by $1.06 billion in convertible notes and meaningful warrant liabilities. The pressure intensified in the third quarter and shortly afterward, when TeraWulf secured more than $5 billion in additional financing, including $3.2 billion in 7.75% senior secured notes due in 2030 and over $2 billion in low-interest convertible notes maturing between 2031 and 2032. While this capital supports large-scale HPC initiatives and commitments to the Abernathy JV, it also sharply increases future repayment obligations. The resulting leverage materially elevates balance-sheet risk, making the company’s heavy debt burden a major strategic concern for investors. The $424.6 million loss in the third quarter from Google-related warrants and convertible features clearly shows the serious financial risks within TeraWulf’s funding model.
Regulatory Shifts and Client Risks Weigh on TeraWulf
TeraWulf faces mounting regulatory and environmental challenges that threaten to disrupt its bitcoin mining and HPC expansion plans. The changes in laws, permitting rules and compliance requirements could materially delay projects and pressure profitability, particularly in highly regulated, energy-intensive regions. Power availability and infrastructure constraints add to execution risks, while choosing new sites requires navigating complex regulatory frameworks and customer-sensitive environmental conditions. Geopolitical shifts, tariffs and trade restrictions further complicate equipment procurement.
These pressures are heightened by TeraWulf's reliance on just a few major hyperscale clients, notably Google-backed Fluidstack and Core42, which adds another layer of strategic risk to the company's long-term outlook.
WULF’s Earnings Estimate Revision Trend Lower
The Zacks Consensus Estimate for fourth-quarter 2025 loss is pegged at 12 cents per share, which has widened by 5 cents over the past 30 days. The company reported a loss of 8 cents per share in the year-ago quarter.
The Zacks Consensus Estimate for TeraWulf’s 2025 loss is currently pegged at $1.51 per share, worsening by $1.18 over the past 30 days. This follows the company’s 2024 loss of 19 cents per share.
TeraWulf's earnings missed the Zacks Consensus Estimate in all the trailing four quarters, the average negative surprise being 82.14%. The sharp downgrade highlights growing concerns around the company’s profitability.
Image Source: Zacks Investment Research
Conclusion: What Makes WULF a Risky Stock
TeraWulf's stretched valuation, weak earnings projections and deteriorating share performance draw a clear picture of growing risk. High leverage, increasing regulatory and environmental pressures, and overreliance on a small set of clients compound the uncertainty. With earnings estimates trending sharply lower and consistent quarterly misses, the path to sustainable profitability remains unclear. In a volatile crypto market, these growing structural and financial challenges are making WULF an increasingly uncertain investment. Given the increased risk and lack of visible stability, investors may be better off staying away from this Zacks Rank #4 (Sell) stock for now.
Image: Bigstock
Should Investors Exit WULF Stock at a High P/S Multiple of 18.24x?
Key Takeaways
TeraWulf (WULF - Free Report) shares are currently overvalued, as suggested by its Value Score of F.
In terms of the 12-month price/sales (P/S), WULF is trading at 18.24X, significantly higher than the Zacks Financial- Miscellaneous Services industry and the Zacks Finance sector’s 3.23X and 8.9X, respectively.
At such a high valuation, the question arises whether WULF stock is still a worthy investment, or is it a good time to consider taking profits? Let's take a closer look.
Price/Sales Ratio (F12M)
Image Source: Zacks Investment Research
Over the past month, WULF shares have fallen 4.9%, underperforming the Zacks Finance sector’s gain of 2.4% and the S&P 500’s return of 0.7%.
Market volatility has had a major impact on Bitcoin mining operations, directly weighing on TeraWulf's stock performance and affecting near-term stability. Other alternative crypto stocks, such as Riot Platforms (RIOT - Free Report) , CleanSpark (CLSK - Free Report) and Marathon Digital (MARA - Free Report) , are also being impacted by the market volatility. In the past month, CleanSpark, Riot Platforms and Marathon Digital have recorded declines of 19.1%, 25.2% and 35.3%, respectively.
RIOT is expanding U.S. mining capacity post-halving, CLSK is emphasizing low-cost, energy-efficient operations, and MARA is rapidly scaling hash-rate leadership — all directly comparable to WULF in the current bitcoin-mining landscape.
1-Month Share Price Performance
Image Source: Zacks Investment Research
Heavy Debt Burden Emerges as a Major Strategic Risk for WULF
TeraWulf’s long-term financial position has become increasingly strained as aggressive funding for its HPC (High Performance Computing) expansion has led to a significant buildup of debt. As of Sept. 30, 2025, the company held $2.2 billion in total liabilities against $2.5 billion in assets, driven largely by $1.06 billion in convertible notes and meaningful warrant liabilities. The pressure intensified in the third quarter and shortly afterward, when TeraWulf secured more than $5 billion in additional financing, including $3.2 billion in 7.75% senior secured notes due in 2030 and over $2 billion in low-interest convertible notes maturing between 2031 and 2032. While this capital supports large-scale HPC initiatives and commitments to the Abernathy JV, it also sharply increases future repayment obligations. The resulting leverage materially elevates balance-sheet risk, making the company’s heavy debt burden a major strategic concern for investors. The $424.6 million loss in the third quarter from Google-related warrants and convertible features clearly shows the serious financial risks within TeraWulf’s funding model.
Regulatory Shifts and Client Risks Weigh on TeraWulf
TeraWulf faces mounting regulatory and environmental challenges that threaten to disrupt its bitcoin mining and HPC expansion plans. The changes in laws, permitting rules and compliance requirements could materially delay projects and pressure profitability, particularly in highly regulated, energy-intensive regions. Power availability and infrastructure constraints add to execution risks, while choosing new sites requires navigating complex regulatory frameworks and customer-sensitive environmental conditions. Geopolitical shifts, tariffs and trade restrictions further complicate equipment procurement.
These pressures are heightened by TeraWulf's reliance on just a few major hyperscale clients, notably Google-backed Fluidstack and Core42, which adds another layer of strategic risk to the company's long-term outlook.
WULF’s Earnings Estimate Revision Trend Lower
The Zacks Consensus Estimate for fourth-quarter 2025 loss is pegged at 12 cents per share, which has widened by 5 cents over the past 30 days. The company reported a loss of 8 cents per share in the year-ago quarter.
The Zacks Consensus Estimate for TeraWulf’s 2025 loss is currently pegged at $1.51 per share, worsening by $1.18 over the past 30 days. This follows the company’s 2024 loss of 19 cents per share.
TeraWulf's earnings missed the Zacks Consensus Estimate in all the trailing four quarters, the average negative surprise being 82.14%. The sharp downgrade highlights growing concerns around the company’s profitability.
Image Source: Zacks Investment Research
Conclusion: What Makes WULF a Risky Stock
TeraWulf's stretched valuation, weak earnings projections and deteriorating share performance draw a clear picture of growing risk. High leverage, increasing regulatory and environmental pressures, and overreliance on a small set of clients compound the uncertainty. With earnings estimates trending sharply lower and consistent quarterly misses, the path to sustainable profitability remains unclear. In a volatile crypto market, these growing structural and financial challenges are making WULF an increasingly uncertain investment. Given the increased risk and lack of visible stability, investors may be better off staying away from this Zacks Rank #4 (Sell) stock for now.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.