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IREN to Report Q1 Earnings: Should You Buy, Sell or Hold the Stock?

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Key Takeaways

  • IREN's Q1 estimates point to an 8.46% revenue decline and a wider loss of 49 cents per share.
  • AI cloud growth from Horizon 1 may be offset by falling bitcoin mining revenues and higher operating costs.
  • IREN shares have fallen 43.7% YTD, while its 2.02X forward P/S trails the industry's 2.58X multiple.

IREN Limited (IREN - Free Report) is set to report its first-quarter fiscal 2027 results on Nov. 5, after the market close.

The Zacks Consensus Estimate for IREN’s fiscal first-quarter revenues is currently pegged at $219.95 million, indicating an 8.46% year-over-year decline. The consensus mark for the bottom line is currently pegged at a loss of 49 cents, deteriorating by 3 cents over the past 30 days. This also indicates a wider loss than the 34 cents per share reported in the year-ago quarter. 

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Over the last four quarters, the company has surpassed the Zacks Consensus Estimate in one quarter and missed in the remaining three periods. This is depicted in the graph below.

IREN Limited Price and EPS Surprise

IREN Limited Price and EPS Surprise

IREN Limited price-eps-surprise | IREN Limited Quote

Earnings Whispers for IREN Limited Stock

Our proven model does not conclusively predict an earnings beat for IREN this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here. 

IREN has an Earnings ESP of +23.97% and a Zacks Rank #4 (Sell). 

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Key Factors to Watch Ahead of IREN’s Q1 Fiscal 2027 Results

IREN Limited is likely to have faced a mixed fiscal first quarter of 2027 as its shift from bitcoin mining to AI cloud services continued. While new GPU capacity expected lifted cloud revenues, mining withdrawals and rising operating costs is likely to have restricted overall earnings improvement. The company reported revenues of $137.2 million in the fourth quarter of fiscal 2026. 

Microsoft's acceptance of the 50-megawatt Horizon 1 deployment in August is likely to have boosted AI cloud services revenues during the quarter. Management had expected operating annualized run-rate revenue (ARR) to remain near $1 billion through September. Still, the partial-quarter contribution means recognized revenue could be considerably below this annualized metric.

Bitcoin mining likely remained a drag. Mining revenues had fallen from $111.2 million in March to $66.7 million in June as the company removed hardware. Management had targeted an effective mining shutdown by December 2026, suggesting a further decline in September-quarter mining revenues, potentially offsetting cloud services growth. 

Meanwhile, higher spending likely pressured margins. IREN projected a sequential $40-$50 million rise in first-quarter cash SG&A expenses, reflecting hiring, marketing, research, development and operations ahead of revenue growth. With adjusted EBITDA already declining from $59.5 million in March to $19.2 million in June, the company is likely to have struggled to maintain profitability.

The August acquisition of Mirantis could have added software-related expenses and integration complexity, although its immediate revenue contribution remains uncertain. Major remaining GPU deployments, including Horizons 2-4, were scheduled for December rather than September. Consequently, investors need to focus on recognized cloud revenues, mining declines, cost trends and potential impairment charges.

IREN Stock Price Performance

IREN shares have declined 43.7% in the year-to-date period, wider than the broader Zacks Financial - Miscellaneous Services industry’s decline of 17.6%.

Compared with its peers, IREN has underperformed Applied Digital (APLD - Free Report) and TeraWulf (WULF - Free Report) . Year to date, shares of Applied Digital have declined 33.9%, while TeraWulf have inched up 0.1%.

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IREN Stock Valuation

In terms of forward 12-month price/sales, IREN is trading at 2.02X, lower than the Zacks Financial - Miscellaneous Services industry’s 2.58X. IREN has a  Value Score of D. 

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Image Source: Zacks Investment Research

Compared with its peers, IREN Limited has a lower P/S multiple than Applied Digital and TeraWulf. At present, Applied Digital and TeraWulf trade at forward 12-month Price/Sales ratios of 4.26 and 8.51, respectively.

Conclusion

IREN's AI cloud expansion provides a growing source of revenue beyond bitcoin mining, with Microsoft's Horizon 1 acceptance supporting stronger quarterly activity. Nevertheless, the September-quarter earnings outlook remains challenging. Mining revenues are likely to have declined faster than new cloud deployments could replace it, while management's projected $40-$50 million sequential increase in cash SG&A expenses is likely to have affected operating margins. 

The Mirantis acquisition may enhance service capabilities, but integration demands and share issuance add near-term uncertainty. Although existing customer prepayments and GPU financing help fund expansion, substantial investment requirements, debt servicing and execution risks persist. Until operating results demonstrate stronger earnings conversion and more consistent cost control, reducing exposure appears prudent over the near term.

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