Shares of CoreWeave Inc (NASDAQ:CRWV) rose about 21% in morning trading on Wednesday, after the cloud-computing company on Tuesday reported its third-quarter results.
Here are some key analyst takeaways:
- DA Davidson analyst Gil Luria reiterated a Neutral rating, while slashing the price target from $100 to $45.
- Cantor Fitzgerald analyst Brett Knoblauch maintained an Overweight rating, while cutting the price target from $176 to $100.
- Rosenblatt Securities analyst John McPeake reaffirmed a Buy rating and price target of $160.
- JPMorgan analyst Samik Chatterjee reiterated an Overweight rating and price target of $125.
- Needham analyst John Todaro reiterated a Hold rating on the stock.
Check out other analyst stock ratings.
DA Davidson: CoreWeave’s total revenue grew 168% year over year to $3.7 billion, with revenue backlog rising around $28 billion sequentially to $132.5 billion, Luria said in a note. Management guided to full-year revenue of $13.15 billion at the midpoint, implying revenue of around $4.8 billion for the fourth quarter, he added.
CoreWeave has been struggling to pivot from its debt-based capital strategy by borrowing from customers and vendors as well as relying on customer guarantees, the analyst stated. “Since these also come at a high cost of capital, likely >9% and returns are still <5%, CoreWeave will continue to destroy value," he further wrote.
Cantor Fitzgerald: CoreWeave reported revenue of $3.661 billion and adjusted EBITDA of $2.256 billion, topping consensus estimates of $3.543 billion and $2.035 billion, respectively, Knoblauch said. Management’s guidance reflects revenue of $4.836 billion at the midpoint, which implies 32.1% sequential and 207.6% year-over-year growth, he added.
The price target has been lowered to reflect “the de-rating that has occurred across the AI cloud sector,” the analyst wrote. CoreWeave expects to raise less than $5 billion through 2027 in “incremental parent-level capital,” he further stated.
Rosenblatt Securities: CoreWeave’s revenue growth accelerated from 112% year over year in the second quarter to 168% in the third, McPeake said. The company guided to roughly tripling revenue year over year in the fourth quarter, he added.
The analyst noted that CoreWeave is sourcing liquidity not via unsecured debt but through:
- Customer pre-payments
- Innovative shorter-term delayed draw term loan (DDTL) facilities
- Cash on hand
- Operating cash flow
“CoreWeave’s 3Q results, guide, and earnings call answered the key questions investors needed to be comfortable buying or owning one of the purest plays in the most powerful technology cycle since the railroads,” he further wrote.
JPMorgan: CoreWeave’s latest results and commentary address concerns over the company’s reliance on capital markets, Chatterjee said. The company laid out a “robust” plan to address committed backlog in 2027 with less than $5 billion in parent-level equity raises, he added.
The analyst noted that the following stood out:
- Operating margins reached low double-digits a quarter earlier than the company’s target
- Prepayments from customers are already ramping
- Capital cost of asset-backed debt has not moved in sync with cost of unsecured debt
- The company does not expect to raise unsecured debt in 2027
Needham: CoreWeave reported adjusted operating income of $379 million, above the Street’s $240 million estimate and Needham’s $245 million forecast, Todaro said.
He added that the positives in the quarter were:
- Improving EBIT margins
- Elevated customer prepayments
- Upcoming DDTL facility at attractive rates
- Raised guidance
“CRWV is becoming more patient about growth, deliberately keeping ’28 capacity unsigned,” he further wrote.
CRWV Price Action: CoreWeave shares were up 21.26% at $59.09 at the time of publication Wednesday, according to Benzinga Pro data.
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