HC Wainwright has reaffirmed its buy rating on Bitfarms (NASDAQ:BIT) stock with a target price of $4. Analyst Mike Colonnese believes that Bitfarms is currently one of the most undervalued stocks in the BTC mining industry.
Colonnese points out that Bitfarms’ openness to a potential sale to maximize shareholder value could result in a bid significantly higher than the current trading price of BITF.
In a recent research note, Colonnese, who recently initiated coverage of the Bitcoin mining company’s stock, expressed a bullish outlook for BITF.
Bitfarms Stock Receives Buy Rating from Analysts
HC Wainwright analyst Mike Colonnese highlights Bitfarm as one of the most overlooked publicly traded Bitcoin miners. He views Bitfarm’s recent $3.7 million deal for 120 MW of power in an all-stock transaction as a sign of the company’s strong growth strategy.
Following the announcement of Bitfarms’ expansion plans last week, the company’s shares surged by 15%. The agreement will enable Bitfarms to bring 120 MW of power online at a new site in Sharon, Pennsylvania, increasing its capacity by 0.6 EH/s in the fourth quarter of 2024 and 8 EH/s by the second half of 2025.
Furthermore, Bitfarms also plans to add another 6 EH/s through a 100 MW expansion at Yguazu, bringing its total capacity to 21 EH/s by the end of 2024 and aiming for 35 EH/s by the end of 2025.
Analyst’s Positive Outlook
The analyst projects that Bitfarms’ owned and operated infrastructure will grow to approximately 650 MW by 2025. With the addition of the new development site in Sharon, PA, Bitfarms is expected to boost its total power capacity by 170% to 648 MW in 2025, up from the current 240 MW.
Risks and Potential Challenges
Despite the recent market turbulence and the Riot takeover situation, Bitfarms’ stock has seen a 30% increase in June and a nearly 24% increase over the past five days, bringing its year-to-date gains to 5.7%. However, HC Wainwright warns of potential risks that could prevent BITF from reaching the $4 price target, including volatility in Bitcoin prices, delays in new mining facility operations, and the possibility of shareholder dilution from equity capital raises.