On Wednesday, mining specialist Riot Platforms (NASDAQ:) received an outperform rating from Macquarie, which initiated trading on the company’s shares. The firm set a price target for Riot Platforms at $15.00. The new rating indicates a positive outlook for the company’s shares.
Macquarie’s report highlights Riot Platforms’ scale as a vertically integrated bitcoin miner. The company’s operations span infrastructure management, power, computing and cooling technologies. The company said Riot Platforms operates one of the largest sites in the industry, which it expects to improve operational efficiencies once fully built out.
Macquarie also noted the advancements being made at Riot’s bespoke cooling infrastructure. The analyst cited the company’s geographic location, power trading and cooling technology as some of the company’s unique attributes that contribute to its competitive position in the bitcoin mining sector.
The Outperform rating indicates that Macquarie believes Riot Platforms shares will outperform the average return of the stocks it covers. The $15.00 price target indicates the firm’s forecast for the future price level of Riot Platforms shares.
Riot Platforms’ focus on Bitcoin mining positions it to be in a dynamic and evolving sector, and Macquarie’s backing reflects confidence in Riot’s ability to leverage its unique attributes to succeed in the competitive cryptocurrency mining environment.
In recent news, Bitfarms Ltd. and Riot Platforms Inc., two of the biggest players in the cryptocurrency mining industry, have reached a settlement agreement. The agreement, which resolved an undisclosed dispute between the two companies, brings several changes to Bitfarms’ board of directors. These changes include the resignation of Andrés Finkielsztain and the appointment of Amy Freedman. In addition, Riot Platforms has agreed to withdraw its previous request and accept a standstill clause through Bitfarms’ 2026 annual general meeting.
Riot Platforms also achieved a significant milestone by holding over 10,000 Bitcoin and acquiring an additional 1 million common shares, increasing its stake in Bitfarms to 18.9%. The company reported revenue of $70 million, beating expectations, but adjusted EBITDA was well below expectations at $16 million. Following these developments, Needham maintained a buy rating on Riot Platforms, while Stifel Canada initiated coverage with a Speculative Buy rating.
Additionally, Riot Platforms announced that it will remove its data center hosting segment from its reportable operating segments following the termination of all contracts with the company’s data center hosting and colocation customers.
InvestingPro Insights
The outperform rating and optimistic price target that Macquarie recently placed on Riot Platforms (NASDAQ:RIOT) are further complemented by InvestingPro’s insights. Notably, Riot Platforms maintains a favorable cash position, with more cash than debt on its balance sheet, which is a positive sign for investors considering the company’s financial position and potential resilience. Additionally, analysts expect both net profit and revenue to increase this year, which is in line with Macquarie’s positive outlook for the stock.
From a valuation perspective, Riot Platforms is trading at a P/E ratio of 18.72, which is considered low relative to its near-term earnings growth, suggesting that the stock may be undervalued. In terms of performance, Riot’s stock has shown strong returns over the past five years, despite recent volatility. For those looking to analyze further, InvestingPro offers additional tips on Riot Platforms to get a comprehensive understanding of the company’s financials and market position.
According to InvestingPro Data, Riot Platforms has a market cap of $2.27 billion and trailing 12-month revenue growth of 9.21% as of Q2 2024. However, it is worth noting that the company faces challenges with gross margins of 18.58% and operating margins of -30.98% over the same period, indicating there are areas in which efficiency improvements and cost cutting are needed.
For investors who want to take a deeper look into Riot Platforms’ performance and potential, InvestingPro offers a set of additional tips to help paint a more detailed picture of the investment environment surrounding this bitcoin mining company.
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