Applied Digital Corp.APLD
NASDAQ • Technology
$33.06
P/E
—
PEG
—
FCF Yield
0.0%
Rev Growth YoY
+128.9% YoY
Gross Margin
27.9%
Health Score
4/10
D/E Ratio
1.11
Confidence
MEDIUM
Business Snapshot
Applied Digital Corp. designs, builds, and operates digital infrastructure for high-performance computing (HPC), including data centres for artificial intelligence and blockchain mining. The company operates in the rapidly growing HPC and AI infrastructure market as a niche challenger, competing against larger cloud providers and data centre REITs by focusing on energy-efficient, purpose-built facilities. With a market capitalisation of $9.45B, it sits at the upper end of mid-cap territory. A key defining characteristic is its early-mover positioning in hosting next-generation AI workloads, though its financial profile remains unprofitable with a net margin of -42.1%.
Financial Health
Applied Digital reports a gross margin of 27.9%, though no prior-year comparison is available to assess direction, while its net margin stands at -42.1%, indicating the company is still deeply unprofitable at the bottom line. The balance sheet shows debt/equity of 1.11x, a moderate leverage level, but the current ratio of 0.77x signals potential short-term liquidity strain as current liabilities exceed current assets...
Risk Assessment
VALUATION — Price/sales of 29.76x implies the market is paying a very high premium for each dollar of revenue, leaving no room for execution missteps. EARNINGS QUALITY — Earnings estimates have been beaten in only 1 of the last 4 quarters, indicating low management guidance credibility. DEBT / LIQUIDITY — The current ratio of 0.77x indicates current liabilities exceed current assets by 23%, signalling potential near-term liquidity pressure. 52-WEEK POSITION — The current price of $33.06 is well below the 52-week high of $50.725, trading 34.8% off the peak and below the midpoint of the range ($29.87). FCF / CASH BURN — Free cash flow of only $256,000 yields effectively 0.0% against the $9.45B market cap, providing negligible financial flexibility for reinvestment....
Applied Digital reports a gross margin of 27.9%, though no prior-year comparison is available to assess direction, while its net margin stands at -42.1%, indicating the company is still deeply unprofitable at the bottom line. The balance sheet shows debt/equity of 1.11x, a moderate leverage level, but the current ratio of 0.77x signals potential short-term liquidity strain as current liabilities exceed current assets. Free cash flow is marginally positive at $256,000, yielding effectively 0.0% against the current market cap, which provides negligible cash generation relative to the company's valuation. Overall, financial health is fragile — negative margins and poor liquidity suggest the company has limited internal buffer and may need to rely on external financing or equity dilution to fund operations and growth.
VALUATION — Price/sales of 29.76x implies the market is paying a very high premium for each dollar of revenue, leaving no room for execution missteps. EARNINGS QUALITY — Earnings estimates have been beaten in only 1 of the last 4 quarters, indicating low management guidance credibility. DEBT / LIQUIDITY — The current ratio of 0.77x indicates current liabilities exceed current assets by 23%, signalling potential near-term liquidity pressure. 52-WEEK POSITION — The current price of $33.06 is well below the 52-week high of $50.725, trading 34.8% off the peak and below the midpoint of the range ($29.87). FCF / CASH BURN — Free cash flow of only $256,000 yields effectively 0.0% against the $9.45B market cap, providing negligible financial flexibility for reinvestment.
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