A Frontrunner in the Bitcoin Mining Race

Putting a price target on Marathon Digital Holdings (MARA) shares recently has proved a fruitless task. Marathon’s specialty is mining Bitcoin, and as the leading cryptocurrency’s price has soared ever higher in recent months, so has Marathon stock.

As a result, H.C. Wainwright analyst Kevin Dede’s targets have proved conservative, necessitating frequent revisions. Since Dede initiated coverage of Marathon in November, each successive month has led to a new price target; March is proving no different.

“Our estimates offered in conjunction with our Feb. 8 note, used a fair and timely bitcoin price in the mid-to-high $30,000 range, but was quickly proven wrong à la Elon Musk’s bitcoin announcement released that very same morning—such is the task of offering forecasts among the throes of bitcoin volatility,” the 5-star analyst said. “Now clearly overly conservative, we are challenged to present a more reasonable view forward.”

To this end, Dede raised his price target from $30 to $50, while reiterating a Buy rating on PLUG shares. The revised figure implies a 22% upside from current levels. (To watch Dede’s track record, click here)

Dede’s price targets might be off, but one thing the analyst has gotten spot on regarding Marathon concerns his Q4 earnings forecast. Marathon reported 4Q20 financial results on Tuesday, delivering revenue of $2.6 million, exhibiting 766.7% of year-over-year growth with the result in-line with Dede’s – and the Street’s – expectations. The figure also puts in the shade the $0.8 million in sales the company reported in the September quarter, marking the “onset of the company’s launch of large-scale industrial bitcoin mining.”

And large scale is certainly what Marathon is after; Management reiterated its target to have its 103,000 Bitmain Antminer S19-series fleet generating 10.4 EH/s of bitcoin mining horsepower by the end of the March 2022 quarter.

As such, Dede believes Marathon’s miner acquisitions last year “place the company on track to lead the North American bitcoin mining race with 10.4 EH/s deployed over the next 12 months.”

Accordingly, Dede expects Marathon to generate more revenue and raised his 2021E sales estimate from $195.7 million to $286.1 million.

However, having learnt a lesson from trying to predict anything Bitcoin related, Dede remains “hesitant to offer estimates for the out year given inherent whimsy in the bitcoin mining environment.”

Some companies elude Wall Street’s gaze and Marathon seems to be one such name right now; Dede’s is the only analyst review on record. (See Marathon stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.


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