CoreWeave stock rated as a buy due to undervaluation and growth potential

2 months ago

Parkev Tatevosian, CFA

"when you look at valuation, now I've shared with you the valuation on my proprietary DCF where I calculated an intrinsic value per share of 123 versus a current market price of 74 suggesting that this stock is undervalued at these prices. But if you go to fisc.ai, AI, which is my preferred data provider, and you look at Core Weave's forward price to operating cash flow, it's trading at a ridiculously cheap value at 6.4. But this valuation can be misleading because the large bulk of Core Weave's spending is going in capital expenditures, which is not included in operating cash flow. And so it's understandable why investors are shying away from coreweave stock. But I think overall the risk versus reward is worthwhile and I have core stock rated as a buy."

The analyst highlights CoreWeave's undervaluation, noting an intrinsic value of 123 versus a market price of 74 and an attractive forward operating cash flow multiple. Despite concerns regarding heavy capital expenditures and capacity limits, the recommendation is to buy, supported by strong contracted orders over the next 12 months that bolster revenue certainty.

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