On Wednesday, Cantor Fitzgerald maintained an Overweight rating and a $5.00 price target for Bitfarms Ltd. (NASDAQ: BITF), a cryptocurrency mining company. Despite Bitfarms' report of producing 217 Bitcoin in September, which fell short of the anticipated 254 Bitcoin, the firm stays optimistic about the company's future.
Bitfarms experienced a roughly 14% decline in Bitcoin mining from August to September, attributed mainly to a 1.2% increase in average network difficulty. The company's operating hashrate showed a marginal decline, maintaining at 10.3 exahashes per second (EH/S) in the last quarter, slightly down from 10.4 EH/S in August.
The company has hit its year-end efficiency goal early, achieving 21 watts per terahash (w/TH), an improvement from the 25 w/TH seen in August. This efficiency leap was driven by the integration of approximately 5,000 T21 Bitmain ASIC mining rigs across three sites, enhancing data center margins and mining economics.
Bitfarms' current operating capacity is steady at 310 megawatts (MW), but the company has ambitious expansion plans. By the end of 2024, Bitfarms expects to activate an additional 30 MW at its new Sharon, Pennsylvania, location, with the potential to increase this site's capacity to 120 MW by the end of 2025.
Moreover, the recent acquisition of Stronghold Digital Mining could add another 165 MW of capacity once the deal is finalized, which is anticipated in the first quarter of 2025. There are also plans to boost the Stronghold assets to about 300 MW by the end of 2025 and potentially up to 955 MW in the longer term.
Both the Sharon site and the Stronghold assets are considered prime locations for artificial intelligence and high-performance computing (AI/HPC) due to their position on the PJM grid, which provides reliable and redundant power.
In other recent news, Bitfarms Ltd. and Riot Platforms (NASDAQ:RIOT) have settled their takeover dispute, allowing Bitfarms to refocus on its growth strategy. The settlement concludes Riot's hostile bid to acquire Bitfarms, which began in April and included the purchase of 90.1 million Bitfarms shares. Analysts from H.C. Wainwright have maintained a Buy rating and a $4.00 price target for Bitfarms following the settlement.
In addition to the settlement, Bitfarms has announced an accelerated deployment of Bitcoin miners at a Pennsylvania site. This move, expected to contribute an additional 2.2 exahash per second to Bitfarms' capacity, is part of the company's strategy to reach 21 EH/s of computing power by the end of 2024.
However, Bitfarms reported a decrease in its Q2 2024 revenue to $42 million, along with a net loss of $27 million. Despite the financial downturn, the company continues to pursue its growth strategy. Riot Platforms has also increased its stake in Bitfarms to 18.9%, acquiring an additional one million common shares.
InvestingPro Insights
Despite the recent production shortfall, Bitfarms Ltd. (NASDAQ: BITF) shows promising signs for investors looking at the long-term potential of cryptocurrency mining companies. According to InvestingPro data, Bitfarms has demonstrated strong revenue growth, with a 37.27% increase in the last twelve months as of Q2 2024. This aligns with the company's ambitious expansion plans and efficiency improvements mentioned in the article.
InvestingPro Tips highlight that Bitfarms holds more cash than debt on its balance sheet, which could provide financial flexibility as it pursues its growth strategy. Additionally, analysts anticipate sales growth in the current year, supporting the positive outlook presented by Cantor Fitzgerald.
However, investors should note that the company is currently not profitable over the last twelve months, with a negative gross profit margin. This underscores the importance of the efficiency gains and expansion plans detailed in the article, as Bitfarms works towards improving its financial performance.
For those interested in a deeper analysis, InvestingPro offers 12 additional tips for Bitfarms, providing a more comprehensive view of the company's financial health and market position.
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