Riots Stock Holds Promising Potential for Substantial Organic Growth According to Bitcoin Mining Analyst
According to H.C. Wainwright analyst Mike Colonnese, Riot Platforms’ stock presents an attractive buying opportunity due to its potential for significant organic growth. Despite a 34% decline year-to-date, attributed to a broader correction in the cryptocurrency market affecting Bitcoin (BTC) and altcoins, Colonnese believes that Riot Platforms has room for further expansion.
In a recent research note shared with crypto.news, Colonnese reiterated a buy rating for RIOT with a price target of $17. He pointed out that Riot Platforms released its second-quarter financial results on July 31, showing substantial operational growth during the period. CEO Jason Les emphasized the company’s progress in executing its long-term growth strategy.
Colonnese highlighted that Riot Platforms has raised its outlook for 2024 and 2025, reporting positive second-quarter results. Despite a mixed financial performance, the company exceeded estimates on various metrics, including engineering revenues. Riot also surpassed its hash rate guidance for the quarter, achieving 21.4 exahashes per second.
The company experienced a 77% quarter-on-quarter growth by the end of June, reaching 22 EH/s. This growth rate in hashrate is the highest among public miners tracked by H.C. Wainwright, according to Colonnese.
Riot Platforms is also focusing on expanding its capacity, with the recent acquisition of Kentucky-based BTC miner, Block Mining. This acquisition aligns with Riot’s growth objectives for 2024 and 2025. Despite challenges in the planned acquisition of Bitcoin miner Bitfarms, Riot remains optimistic about its future success.
The company is well-positioned for the next 18 months, according to the H.C. Wainwright note, thanks to its strong balance sheet with over $1 billion in liquidity compared to estimated capex requirements of around $694 million until the end of 2025. Colonnese believes that Riot, with its low power costs, good scale, and robust balance sheet, is poised to benefit from the next phase of the bull market cycle for BTC.
Riot Projects 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 on August 1, 2024, down 2.2%, Riot Platforms shows promise for future growth.
