Riot Platforms’ stock presents a promising investment opportunity, according to H.C. Wainwright analyst Mike Colonnese. Despite a 34% decline in value so far this year, primarily due to the overall market correction affecting Bitcoin and other cryptocurrencies, Colonnese remains optimistic about the potential for growth in the bitcoin mining company.
In a recent research note shared with crypto.news, Colonnese emphasized the organic growth prospects for Riot Platforms as it looks towards expansion. He reiterated a buy rating for RIOT with a $17 price target.
The company’s financial performance for the second quarter of the year showed significant operational growth, as highlighted in the results released on July 31. CEO Jason Les expressed satisfaction with the progress made towards the long-term growth strategy.
Colonnese noted that Riot has revised its outlook for 2024 and 2025, reporting positive top-line results for the second quarter. Despite some mixed financial results, the company exceeded expectations on various metrics, including increased engineering revenues. Riot also surpassed its hash rate guidance, reaching 21.4 exahashes per second.
The impressive 77% quarter-on-quarter growth in the months ending June 30 led Riot to achieve a hashrate of 22 EH/s, marking the fastest growth rate among public miners tracked by H.C. Wainwright, according to Colonnese.
Riot’s ambitious expansion efforts include the recent acquisition of Kentucky-based BTC miner, Block Mining. This strategic move aligns Riot with its growth objectives for 2024 and 2025.
Despite facing challenges with initial plans to acquire Bitcoin miner Bitfarms, Riot remains on a path to success. The company’s strong balance sheet, boasting over $1 billion in liquidity compared to estimated capex requirements of about $694 million through 2025, positions Riot favorably for the next 18 months.
Colonnese believes that Riot’s competitive advantage lies in its low power costs, scalability, and robust financial position, making it well-positioned to capitalize on the next phase of the BTC bull market cycle.
Riot’s guidance anticipates a hashrate growth to 36.3 EH/s by the end of 2024 and 56.6 EH/s by the end of 2025. Despite trading at around $9.97, down 2.2% on August 1, 2024, RIOT stock continues to hold promise for investors.
In related news, Bitfarms introduces a new ‘poison pill’ strategy following the termination of its previous plan by Canadian regulators.