Core Scientific, Inc./tx (CORZ) DCF Valuation & Fundamental Primer
Core Scientific, Inc./tx (CORZ) currently trades at $16.73 with an enterprise value of $-7.55B. Our proprietary institutional model rates Core Scientific, Inc./tx at 35/100 (Grade: D · High Fundamental Risk). The current market price prices in an implied 5-year revenue CAGR of 47.5% vs. historical growth of 70.6% (Substantial Margin of Safety).
Institutional fundamental teardown of Core Scientific, Inc. (CORZ) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Core Scientific, Inc./tx (CORZ) 3-Scenario DCF Valuation Range
Stress-test CORZ's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $16.73).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $25.67 +53% | $27.56 +65% | $29.76 +78% | $32.37 +93% | $35.49 +112% |
| 9.3% | $22.65 +35% | $24.14 +44% | $25.84 +54% | $27.82 +66% | $30.15 +80% |
| 10.0% | $20.17 +21% | $21.37 +28% | $22.72 +36% | $24.27 +45% | $26.06 +56% |
| 10.8% | $18.10 +8% | $19.08 +14% | $20.18 +21% | $21.41 +28% | $22.82 +36% |
| 11.5% | $16.36 -2% | $17.17 +3% | $18.07 +8% | $19.07 +14% | $20.21 +21% |
Institutional Software Quality Scorecard (35/100 · Grade D)
Significant cash burn, high dilution, and distressed balance sheet characteristics.
Negative free cash flow; business consumes cash to sustain operations
Standard software SBC dilution; modest equity transfer to employees
Sub-par gross margins; higher cost of delivery or hardware/services mix
Leveraged balance sheet coupled with cash burn; heightened refinancing risk
Core Investment Strengths & Moats
Key Operational & Dilution Risks
- Negative free cash flow burn of $-52.1M over trailing twelve months
- Lower software gross margins (23.7%), indicating higher hosting or service delivery drag
- Balance sheet vulnerability: Net debt of $363.6M while operating with cash burn
Reverse-DCF Solver: What Growth is Priced Into CORZ?
The current share price only requires 47.5% 5-year CAGR (62.8% dilution-adjusted), well below historical growth of 70.6%. If the company maintains baseline execution, there is asymmetric upside.
Headline Reverse-DCF ignores Stock-Based Compensation (10.2% of revenue) and annual share dilution (1.2%/yr). Accounting for both requires 62.8% 5-year revenue CAGR to justify $16.73/sh on a true per-share economic cash flow basis.
Core Scientific, Inc./tx (CORZ) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $510.7M | $510.7M | $871.1M | $1.49B | $2.53B | $4.32B | $7.38B |
| Gross Profit | $121.1M | $121.1M | $206.5M | $352.3M | $601.0M | $1.03B | $1.75B |
| Operating Income (EBIT) | $-19.2M | $-19.2M | $-32.8M | $-55.9M | $-95.3M | $-162.6M | $-277.3M |
| Stock-Based Compensation (SBC) | $51.9M | $51.9M | $88.6M | $151.1M | $257.8M | $439.7M | $750.1M |
| Unlevered Free Cash Flow (FCF) | $-52.1M | $-52.1M | $-88.9M | $-151.6M | $-258.5M | $-441.0M | $-752.3M |
| SBC-Adjusted True Cash Flow | $-104.0M | $-104.0M | $-177.4M | $-302.7M | $-516.3M | $-880.7M | $-1.50B |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -19.8 + 0.60 × (Rule of 40) · R² = 55%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Core Scientific, Inc./tx | CORZ | $5.19B | $510.7M | 23.7% | -10.2% | 60.4% | 10.2% | 10.9× |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 10.9× | $5.55B | $5.19B | $16.73 | 0.0% |
| -20% Multiple Compression | 8.7× | $4.44B | $4.08B | $13.15 | -20.0% |
| -35% Multiple Compression | 7.1× | $3.61B | $3.24B | $10.46 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $2.55B | $2.19B | $7.06 | -54.0% |
Frequently Asked Questions: Core Scientific, Inc./tx (CORZ) Valuation
What is Core Scientific, Inc./tx (CORZ)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Core Scientific, Inc./tx (CORZ) has a Base Case implied value of -$25.53 per share (with a Bear Case of -$6.22 and a Bull Case of -$67.02), compared to its current price of $16.73. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Core Scientific, Inc./tx (CORZ)'s Rule of 40 score and Free Cash Flow margin?
Core Scientific, Inc./tx achieves a Rule of 40 score of 60.4%, combining a 70.6% revenue growth run-rate with a -10.2% TTM free cash flow margin on $510.7M in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into CORZ stock according to Reverse-DCF analysis?
At $16.73 per share (Enterprise Value of $5.55B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 47.5%, compared to Core Scientific, Inc./tx's historical CAGR of 70.6%. Overall market expectations are rated as "Substantial Margin of Safety".
How does Core Scientific, Inc./tx compare to Software & Cloud Services software peers?
Core Scientific, Inc./tx (CORZ) earns an institutional Software Quality Score of 35/100 (Grade D — High Fundamental Risk). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact Core Scientific, Inc./tx (CORZ)'s valuation?
Core Scientific, Inc./tx recorded $51.9M in TTM stock-based compensation (10.2% of revenue). When treating SBC as a cash-equivalent compensation expense, Core Scientific, Inc./tx's SBC-adjusted free cash flow yield is -2.0%, scoring 16/25 on our Shareholder Dilution Friction pillar.