DGXX Stock Forecast & Price Target

Digi Power X Inc's financial outlook for FY25 has improved, with sales estimates increasing to $34.8 million due to the deployment of new infrastructure, reflecting the company's strategic focus on enhancing power capabilities. Additionally, there is potential for a significant increase in critical IT load to 40MW by the end of FY26, contingent on robust AI demand and successful long-term contract conversions, indicating a pathway for substantial revenue growth. The company's valuation remains attractive at a market cap-to-sales multiple of 7x, particularly as Digi Power X navigates opportunities in the high-performance computing sector, further supporting the belief in its positive market position.

Digi Power X Inc. has experienced a notable decline in revenue, with a 13% decrease in total performance attributed to a significant 35% drop in energy sales, indicating potential challenges in maintaining a stable income stream. The company's recent adjustments to revenue projections for FY26, lowering estimates to $33.2 million from $47.2 million due to a conservative deployment schedule and lack of customers, suggest a deteriorating sales outlook. Additionally, the absence of contributions from the NeoCloudz GPU-as-a-service initiative, combined with inherent risks in the GaaS market related to high customer turnover and strong competition, further exacerbates concerns about future growth and profitability.