Bitcoin miner Riot Platforms’ stock is a buy due to its significant organic growth opportunities, H.C. Wainwright analyst Mike Colonnese said in a note.
He has reiterated a buy rating for RIOT with a $17 price target.
Riot’s financial results
Riot released its second quarter results on July 31, revealing substantial operational growth during the quarter. Jason Les, CEO of Riot, noted progress on its long-term growth strategy.
According to H.C. Wainwright’s Colonnese, Riot “officially raised its 2024 and 2025 outlook and reported 2Q24 top line results.” Although mixed, the results exceeded estimates on several metrics, including stronger engineering revenues. Riot also surpassed its hash rate guidance for the quarter, reaching 21.4 exahashes per second.
The 77% quarter-on-quarter growth in the three months ending June 30 meant Riot reached 22 EH/s, the fastest growth rate in hashrate for public miners tracked by H.C. Wainwright, Colonnese added.
Expansion efforts
Bullish projections for RIOT also come as the miner looks to expand its capacity further. Recently, Riot acquired Kentucky-based BTC miner, Block Mining.
The acquisition aligns with Riot’s 2024 and 2025 growth objectives. Despite challenges with plans to acquire Bitcoin miner Bitfarms, Riot remains on course for success.
Per the H.C. Wainwright note, the company is well-positioned for the next 18 months due to its strong balance sheet, boasting over $1 billion in liquidity against approximately $694 million of estimated capital expenditures to the end of 2025.
“With low power costs, good scale, and a strong balance sheet, we believe Riot is competitively positioned to benefit from the next leg of the bull market cycle for BTC,” the analyst concluded.
Riot’s guidance for the end of 2024 projects a growth to a hashrate of 36.3 EH/s and 56.6 EH/s by the end of 2025.
Meanwhile, RIOT stock traded around $9.97, down 2.2% at 10:27 am ET on Aug. 1, 2024.
