On Tuesday, H.C. Wainwright increased its price target for Bitdeer Technologies Group (NASDAQ: BTDR) to $18.00, up from the previous $17.00, while maintaining a Buy rating on the stock. This adjustment followed Bitdeer's third-quarter earnings report released on Monday, which did not meet the firm's expectations due to lower hosting revenues and higher research and development costs. These costs were associated with the launch of Bitdeer's second-generation proprietary mining rig series, the SEALMINER A2.
Despite the third-quarter results falling short, the analyst highlighted the significance of Bitdeer's strategic updates provided during the earnings call. The company has announced its entry into the ASIC business and detailed its self-mining expansion plans for 2025. Bitdeer has secured the capacity to produce 18 EH/s of its SEALMINER A2 in 2025, with deliveries slated to start in the first quarter of that year.
Bitdeer's management plans to allocate approximately 11 EH/s from the initial production for its self-mining operations, while the remaining 7 EH/s will be sold to external customers. This strategy is expected to nearly triple Bitdeer's total self-mining capacity to about 23 EH/s by 2025, a significant increase from the 8.4 EH/s recorded at the end of October. However, the company has chosen not to provide official guidance on these figures.
The firm was further encouraged by the market's response to Bitdeer's first internally developed ASIC available for external customers. The company has already received deposits for 30,000 units of the air-cooled SEALMINER A2 rigs, translating to roughly 7 EH/s. These sales are anticipated to generate approximately $102 million in revenue from ASIC sales for Bitdeer in 2025. This new revenue line had not been previously included in financial models.
The introduction of the ASIC business is expected to provide Bitdeer with a new source of revenue, a significant cost advantage over its competitors, and greater visibility and control over its supply chain. The analyst reiterated a Buy rating for Bitdeer and raised the price target to reflect these developments.
In other recent news, Bitdeer Technologies Group has announced the commencement of mass production for its SEALMINER A1 and A2 mining machines. The company is also increasing its client-hosted mining machines and has highlighted construction updates for its data centers in Norway, Texas, and Bhutan. These are part of the recent developments in Bitdeer's operations.
Further, B.Riley has revised its price target for Bitdeer, reducing it to $12 while maintaining a Buy rating. This move comes as Bitdeer reported a slight decrease in Bitcoin production in September, with a modest increase in operational hash rate. The company also plans to boost its proprietary hash rate with the SEALMINER A1, set for mass production in late 2024.
Bitdeer's AI Cloud services continue to operate at near full capacity, and the company is exploring potential for Tier 3 HPC/AI development at its Ohio sites. Analyst firm Northland initiated coverage of Bitdeer with an Outperform rating, emphasizing the company's shift towards high-performance computing and artificial intelligence. However, Bitdeer's recent earnings report showed revenues of $99.2 million, falling short of the consensus estimate of $108.4 million.
Roth/MKM maintained a positive stance on Bitdeer, highlighting the potential of the company's HPC capabilities, which could generate $850 million in annual recurring revenue. Bitdeer also completed an offering of $172.5 million in convertible senior notes due 2029.
InvestingPro Insights
Bitdeer Technologies Group's recent strategic moves align with its strong market performance, as reflected in InvestingPro data. The company has shown impressive price returns, with a 196.25% increase over the past year and a 71.99% gain in the last three months. This upward trajectory supports H.C. Wainwright's bullish stance and increased price target.
InvestingPro Tips highlight that Bitdeer holds more cash than debt on its balance sheet, which could be advantageous as the company expands its self-mining operations and enters the ASIC business. However, investors should note that the company is quickly burning through cash, which may be attributed to the significant R&D costs mentioned in the earnings report.
While Bitdeer's revenue growth stands at 19.58% for the last twelve months, its quarterly revenue showed a decline of 28.95%. This fluctuation may reflect the cyclical nature of the cryptocurrency mining industry and underscores the importance of Bitdeer's strategic diversification into ASIC sales.
For readers interested in a deeper analysis, InvestingPro offers 13 additional tips for Bitdeer Technologies Group, providing a more comprehensive view of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.