B.Riley has adjusted its outlook on Bitdeer Technologies Group (NASDAQ: BTDR), reducing the price target to $12 from the previous $14 while maintaining a Buy rating on the stock.
The firm's analysis highlighted that Bitdeer produced 164 BTC in September, a slight decrease of 1% month-over-month. Despite this, the company's utilization rate remained high at 97%.
Bitdeer's operational hash rate in September saw a modest increase of 3.9% month-over-month, reaching 8.1 EH/s. The number of client-hosted mining machines stayed the same as in August, but the overall hash rate experienced a slight uptick of 0.3 EH/s. This was attributed to the integration of more efficient mining machines within the hosting operations in Texas.
The company is planning to fill its remaining excess capacity with new customer miners and Bitdeer's own SEALMINERs for self-mining by the first quarter of 2025. Taiwan Semiconductor Manufacturing Company (TSMC) delivered the initial tape-out wafers for SEAL02 in mid-September 2024, with mass production slated to start in November 2024 following testing. The SEALMINER A1 is on track for mass production in the fourth quarter of 2024, which is expected to contribute an additional 3.4 EH/s to Bitdeer's proprietary hash rate.
On the AI front, Bitdeer's AI Cloud services, which utilize NVIDIA (NASDAQ:NVDA) GDX (NYSE:GDX) SuperPod with H100 GPUs, continued to operate at near full capacity in September, mirroring the utilization in August. Following the completion of a feasibility study for Bitdeer's Massillon and Clarington/Hannibal sites in Ohio, the TLM Group confirmed their potential for Tier 3 HPC/AI development. Bitdeer has since initiated talks with development partners and potential clients, leveraging the sites' access to land, power, fiber, and water resources.
In other recent news, Bitdeer Technologies Group has been the focus of several developments. Northland initiated coverage of Bitdeer shares with an Outperform rating, highlighting the company's shift to high-performance computing (HPC) and artificial intelligence (AI).
The firm also noted the introduction of a new ASIC chip to enhance miner production. Bitdeer's recent earnings report showed revenues of $99.2 million, falling short of the consensus estimate of $108.4 million. Despite this, Needham maintained its Buy rating on Bitdeer, even though it lowered its 2024 revenue estimates for the company from $426 million to $352 million.
Roth/MKM also maintained a positive stance on Bitdeer, emphasizing the potential of Bitdeer's HPC capabilities, which could generate $850 million in annual recurring revenue. In addition, Bitdeer completed an offering of $172.5 million in convertible senior notes due 2029. The company is also making strategic moves to diversify its operations, transitioning into the HPC and AI sectors, leveraging approximately 800 megawatts of power in Ohio among other assets.
InvestingPro Insights
To complement the detailed analysis of Bitdeer Technologies Group's (NASDAQ:BTDR) recent performance and future plans, let's examine some key financial metrics and expert insights from InvestingPro.
Bitdeer's market capitalization stands at $1.01 billion, reflecting its position in the cryptocurrency mining industry. The company's revenue growth is noteworthy, with a 31.48% increase over the last twelve months as of Q2 2024, reaching $420.89 million. This aligns with the company's expanding operations and infrastructure projects mentioned in the article.
However, investors should note that Bitdeer is currently not profitable over the last twelve months, with an operating income margin of -4.33%. This is consistent with the company's significant investments in new technologies and infrastructure, such as the SEALMINER development and facility upgrades discussed in the article.
InvestingPro Tips highlight that Bitdeer holds more cash than debt on its balance sheet, which could provide financial flexibility for its ongoing projects. However, the company is also quickly burning through cash, which investors should monitor given the capital-intensive nature of cryptocurrency mining and AI infrastructure development.
The stock's price movements have been quite volatile, with a significant 32.45% drop over the last three months. This volatility may reflect the broader cryptocurrency market fluctuations and investor sentiment towards mining companies.
For those interested in a deeper analysis, InvestingPro offers 10 additional tips for Bitdeer, providing a more comprehensive view of the company's financial health and market position.
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