Rosenblatt reiterates CoreWeave stock Buy rating after pricing update

Investing.com reports that Rosenblatt has reissued a Buy rating on CoreWeave (NASDAQ:CRWV) and maintained a price target of $250.00 following the company's announcement of increased contract prices for compute capacity. CoreWeave has consistently contracted new compute capacity at higher prices, as announced today. This move comes just one day after competitor Nebius introduced price increases, including a 16% rise for four-year-old chips.

CoreWeave plans to raise $6.3 billion in financing, comprising a $3.0 billion convertible note and a $3.3 billion at-the-market equity offering. The funds will be utilized to improve the company's enterprise credit profile and facilitate migration toward investment-grade status. Despite a recent stock price decline of 6.5% over the past week, CoreWeave's valuation remains relatively attractive, trading at a 48% discount to its 52-week high of $153.20.

Notably, CoreWeave operates with a substantial debt burden, with total debt amounting to $51.6 billion. The firm estimates that $47 billion in GPU capital expenditures are currently driving $40 billion in annualized revenue through shorter-dated contracts. Rosenblatt highlights that CoreWeave's debt-to-market capitalization ratio stands at 0.9.

Compared to its competitors, including Nebius and the peer average, CoreWeave trades at a lower enterprise value-to-EBITDA multiple of 5 times 2027 estimates, versus 10 times for Nebius and the peer average. Additionally, CoreWeave has recently expanded its AI capabilities with the deployment of a multi-rack Nvidia Vera Rubin NVL72 cluster on CoreWeave Cloud, along with enhancements to its AI Object Storage, such as cross-region write acceleration and a new Archive tier.