On Tuesday, Cantor Fitzgerald initiated coverage on Riot Platforms (NASDAQ:RIOT) stock, a cryptocurrency mining company, with an Overweight rating and a new price target of $23.00.
The firm highlighted Riot's competitive advantages, including its low cost of mining, significant scale, and a strong balance sheet, which positions it favorably within the industry.
The firm's analysis pointed out that Riot Platforms is set to experience substantial organic capacity growth in the next 18 months. This growth is expected as the company is slated to receive and deploy a large number of mining machines, including models M56++, M66, M66s, and M60s. These additions are projected to boost Riot's year-end 2025 hash rate to over 40 exahashes per second (EH/S).
Further bolstering Riot's growth prospects is its planned acquisition of BITF, which would expand the company's growth opportunities internationally. The acquisition aligns with the company's strategy to increase its market presence and is anticipated to add a significant international dimension to Riot's business operations.
Cantor Fitzgerald also noted that Riot Platforms is currently undervalued compared to its peers, based on the firm's fiscal year 2024 estimated hash rate. The market is valuing Riot at $48 million per 1 EH/S, whereas other leading companies in the sector are valued at $77 million (CIFR) and $59.5 million (CLSK), indicating a favorable valuation for Riot.
The firm's positive outlook on Riot Platforms is underpinned by the company's strategic initiatives and its potential for growth, both organically and through acquisitions.
With the anticipated increase in mining capacity and the strategic acquisition on the horizon, Cantor Fitzgerald's coverage suggests confidence in Riot's future performance within the cryptocurrency mining sector.
In other recent news, Riot Platforms, a key player in the Bitcoin mining sector, has made significant strides in its operations and strategic goals. The company reported a drop in Bitcoin production in May 2024, but managed to increase its total deployed hash rate to 14.7 exahashes per second (EH/s).
Notably, Riot Platforms has proposed a $950 million acquisition of Bitfarms, a fellow crypto mining company, a move that has received mixed reactions from analysts. H.C. Wainwright analysts expressed skepticism about the deal's completion, while Bernstein SocGen Group and JPMorgan (NYSE:JPM) maintained positive ratings on Riot's stock.
Riot Platforms also announced the completion of the first 100 MW building at the Corsicana Facility in Texas, which contributed to its mining capacity. The company anticipates reaching a self-mining hash rate capacity of 31 EH/s by the end of 2024 and has appointed Stephen Howell, CEO of ESS Metron, as Chief Operating Officer.
These developments follow Riot's ambition to become a global leader in Bitcoin mining. The acquisition of Bitfarms would significantly scale Riot's operations, potentially matching the global leader, Marathon, with up to 1.5 GW of power capacity and 52 EH/s of self-mining capacity.
The deal is expected to be advantageous for Riot, allowing the purchase of Bitfarms at a valuation discount on several metrics compared to Riot's own valuation and industry averages.
These are the latest developments in Riot Platforms' journey in the Bitcoin mining industry. The company continues to expand its operations and influence in the sector, despite facing some operational challenges and skepticism from analysts regarding its proposed acquisition of Bitfarms.
InvestingPro Insights
Cantor Fitzgerald's optimistic coverage of Riot Platforms (NASDAQ:RIOT) aligns with several metrics and insights from InvestingPro. With a market capitalization of $2.86 billion and a P/E ratio of 20.43 for the last twelve months as of Q1 2024, Riot stands out as a significant player in the cryptocurrency mining landscape. The company's revenue growth of 13.51% over the same period underscores the firm's potential for expansion and profitability.
Two InvestingPro Tips that are particularly relevant to Cantor Fitzgerald's analysis are Riot's ability to hold more cash than debt on its balance sheet and analysts' anticipation of sales growth in the current year. These factors contribute to Riot's strong financial position and growth prospects, reinforcing the firm's Overweight rating and the price target of $23.00.
As an additional point of interest, InvestingPro offers an extensive list of over 15 tips for Riot Platforms, which can be accessed by visiting https://www.investing.com/pro/RIOT. For those looking to delve deeper into the company's financials and forecasts, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. With such a comprehensive array of insights, investors can gain a well-rounded view of Riot's position and potential within the cryptocurrency mining sector.
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