Is Iris Energy Ltd. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Iris Energy Ltd. has moved from attractive to fair, indicating a shift in its perceived value. The company appears to be overvalued given its financial metrics, particularly with a Price to Book Value of 1.65 and an EV to EBITDA ratio of 17.16, which suggests that the market may be pricing in excessive optimism relative to its earnings potential. Additionally, the EV to Sales ratio stands at 5.89, further supporting the notion of overvaluation in comparison to its peers.
In comparison to its industry peers, Iris Energy Ltd. has a significantly negative P/E ratio, while CleanSpark, Inc. shows a more favorable EV to EBITDA of 13.2099, indicating a more attractive valuation. Other peers like TeraWulf, Inc. and Cipher Mining, Inc. also exhibit negative P/E ratios, but their EV to EBITDA ratios are considerably worse, suggesting that Iris is not the only one struggling. Notably, Iris Energy's stock has outperformed the S&P 500 significantly year-to-date with a return of 518.33% compared to the index's 13.30%, which may reflect market speculation rather than fundamental strength.