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. The company appears to be overvalued given its current metrics, particularly in light of its negative P/E ratio and low ROCE of -1.50%. Key ratios include a Price to Book Value of 1.65, an EV to EBITDA of 17.16, and an EV to Sales ratio of 5.89, which suggest that the company's valuation may not be justified by its financial performance.
In comparison to peers, Iris Energy Ltd. has a significantly negative P/E ratio of -216.82, while CleanSpark, Inc. is considered attractive with an EV to EBITDA of 13.21, indicating a more favorable valuation. Additionally, TeraWulf, Inc. has a P/E of -29.75, further highlighting the challenges faced by Iris Energy in its sector. Notably, Iris Energy has outperformed the S&P 500 significantly over the past year with a return of 578.44% compared to the index's 14.08%, but this strong performance does not necessarily reflect a sustainable valuation given the underlying financial metrics.