Does the Microsoft Partnership Signal a Fresh Opportunity in IREN After Recent Price Surge?

If you have been wondering whether IREN is a hidden gem or an overhyped name, you are not alone. Let's dig into what really drives its value. Despite a wild ride this year, including a 475.2% return year-to-date, the past week saw the stock pull back by 11.2%. This could signal shifting optimism or growing caution among investors. Recent headlines highlighting major industry partnerships and IREN's strategic technology rollouts have added extra fuel to the price surge, while also increasing market attention on its future prospects. Notably, speculation around new business initiatives is helping shape sentiment even more than day-to-day trading volatility. When it comes to valuation, IREN scores a strong 5 out of 6 on our value checks. How do common valuation approaches actually stack up, and is there a smarter way to judge whether the stock is really worth buying? Let's dig into the numbers and uncover a more insightful perspective by the end of this article.

IREN delivered 371.9% returns over the last year. See how this stacks up to the rest of the Software industry.

Approach 1: IREN Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by forecasting its future cash flows and discounting them back to today, reflecting both the time value of money and the inherent risks in those projections. This approach provides a more reality-grounded figure compared to simply looking at earnings multiples.

For IREN, the latest twelve months' Free Cash Flow sits at approximately -$1.1 billion, reflecting investment-heavy operations over the recent year. Looking forward, analysts project a substantial shift, with annual Free Cash Flow turning positive and reaching about $525 million by June 2027. From there, Simply Wall St extrapolates further growth, with projections suggesting potential Free Cash Flow could climb to over $2.35 billion by 2035. These figures demonstrate aggressive growth expectations and illustrate how much relies on robust future performance.

Bringing all these projections together, the DCF model calculates an intrinsic value for IREN of $112.27 per share in USD. With the current price trading at a 46.4% discount to this estimate, the model indicates the stock may be significantly undervalued based on anticipated cash flow improvements and growth.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests IREN is undervalued by 46.4%. Track this in your watchlist or portfolio, or discover 865 more undervalued stocks based on cash flows.IREN Discounted Cash Flow as at Nov 2025

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for IREN.

Story Continues

Approach 2: IREN Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely used valuation tool for profitable companies like IREN because it directly relates a company’s market price to its reported earnings. When companies generate consistent profits, the PE ratio offers a clear, apples-to-apples way to compare how much investors are willing to pay for each dollar of earnings.

However, not all PE ratios are created equal. Growth expectations, business risk, and industry dynamics each play a part in determining what a “normal” or “fair” PE should look like. Fast-growing, lower-risk companies can often support higher PE multiples, while more mature or risk-prone firms typically trade at lower levels.

Currently, IREN trades at a PE ratio of 31.5x. For context, the average among industry peers sits higher at 48.1x, while the broader software industry clocks in at 33.1x. On the surface, IREN’s multiple appears a touch below both its direct peer group and the industry as a whole. But headline comparisons often ignore the full picture.

This is where Simply Wall St’s “Fair Ratio” comes in. The Fair Ratio is a tailored benchmark set at 34.5x for IREN. Unlike peer or industry averages, the Fair Ratio is customized by factoring in IREN’s unique blend of expected earnings growth, risk profile, market cap, profit margins and sector effects. It is designed to reflect what a balanced, reasonable PE should be, rather than a simple average. In IREN’s case, the Fair Ratio and the actual PE are close, differing by just around 3x. This indicates the market is pricing IREN about right relative to its fundamentals and outlook.

Result: ABOUT RIGHTNasdaqGS:IREN PE Ratio as at Nov 2025

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1402 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your IREN Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives, Simply Wall St’s tool that ties your personal view of a company’s future to its numbers and fair value.

A Narrative is the story you believe about a company’s direction, and it connects your assumptions, such as future revenue, profit margins, and fair value, to the actual financial forecast. Instead of just looking at ratios, you can lay out your reasoning and assumptions, bringing the “why” behind the numbers into focus.

Narratives are easy to use and found on Simply Wall St’s Community page, where millions of investors create and compare them. They help you make smarter buy or sell decisions by showing exactly how your Fair Value stacks up against the current Price. When facts change, Narratives update automatically to reflect fresh news or earnings releases.

For IREN, for example, one Narrative estimates a fair value as high as $98 per share, based on bold growth from recent AI contracts. Another takes a more conservative view and values the stock at $11, focusing on operational risks and Bitcoin price volatility. Narratives make it clear that investing is not just about statistics. It is about linking your view of the story to transparent, dynamic forecasts.

For IREN however, we'll make it really easy for you with previews of two leading IREN Narratives:

🐂 IREN Bull Case

Fair Value: $98.21

Undervalued by 38.7%

Revenue Growth Rate: 40%

Originally a Bitcoin miner powered by 100% renewable energy, IREN successfully pivoted to AI infrastructure, landing a $9.7B hyperscale Microsoft deal and shifting the narrative from “potential” to confirmed execution. Financial discipline (no debt and significant cash reserves), rapid mining efficiency upgrades, and strategic diversification into high-growth AI Cloud Services underpin bold growth forecasts and improving profitability. Main risks include execution complexity as it rapidly shifts to massive AI contracts, the cyclical and unpredictable nature of Bitcoin prices, and the possibility of further shareholder dilution to fund aggressive expansion.

🐻 IREN Bear Case

Fair Value: $57.00

Overvalued by 5.6%

Revenue Growth Rate: 73.19%

IREN’s dramatic share price surge is tied to federal policy wins, a robust $2.75GW expansion pipeline, and unmatched positioning in Texas as a renewable-powered AI and data center supercluster. Yet, current valuation is “priced for perfection,” assuming flawless execution, sustained federal support, and a competitive edge against major players like CoreWeave and Equinix. This leaves little margin for error. Key risks include execution delays on major projects, regulatory or policy shifts, and ongoing exposure to Bitcoin price volatility as the business transitions toward higher-margin AI Cloud revenue streams.

Do you think there's more to the story for IREN? Head over to our Community to see what others are saying!NasdaqGS:IREN Community Fair Values as at Nov 2025

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include IREN.

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