Bitcoin (BTC) mining stocks are drawing significant attention from investors looking for promising opportunities in the cryptocurrency market.
The recent assassination attempt on former President Trump sent shockwaves through the political landscape, driving Bitcoin prices over $64,000 and boosting Bitcoin miner stocks.
Earlier this year, these stocks struggled due to investor concerns over declining revenues and rising costs following the launch of spot Bitcoin ETFs in the US and the halving event.
However, according to ecoinometrics, Bitcoin mining stocks have been steadily closing the performance gap with Bitcoin itself. The industry has made significant strides in consolidating operations and shifting towards more ventures like cloud computing and artificial intelligence (AI).
According to sources, firms like Northern Data are leveraging these shifts to enhance revenues, positioning Bitcoin mining stocks for potential outperformance in the coming months
In this context, Finbold analyzed the ongoing trends and tracked down the two best stocks with ‘strong buy’ ratings to watch in July 2024.
Riot Platforms (NASDAQ: RIOT) stock
Riot Platforms (NASDAQ: RIOT) has been gaining attention, with shares rising 22% over the past month and nearly 2% in just one day. Analysts and investors are closely watching the company’s upcoming earnings disclosure, where EPS is projected at -$0.16, a 5.88% improvement from last year, and revenue is expected at $71.08 million, down 7.38% year-over-year.
Roth/MKM maintains a buy rating on Riot Platforms with a price target of $20, citing the stock is undervalued compared to peers. Riot’s enterprise value per terahash per second (EV/TH/s) is $85 million, significantly lower than the peer average of $137 million.
This valuation appears conservative next to larger Bitcoin miners like CleanSpark (NASDAQ: CLSK) and Marathon Digital Holdings (NASDAQ: MARA), which have higher valuations.
Riot’s enterprise value to EBITDA (EV/EBITDA) multiple is 7.9x for 2025, versus an average of 12.4x for its competitors. Roth/MKM believes this discount is unwarranted given Riot’s growth potential, particularly at its Corsicana site, with guidance to reach 31 EH/s by the end of 2024.
The firm suggests Riot’s current valuation doesn’t reflect its growth prospects, recommending buying shares for potential significant gains.
With a market cap of $3.53 billion and an enterprise value of $2.61 billion, Riot Platforms stands poised for growth. Key dates include the next earnings report on July 31, 2024.
Wall Street’s RIOT stock 12-month price target. Source: TipRanks
Based on eight Wall Street analysts offering 12-month price targets for Riot Platforms in the last three months, the average price target is $17.50, with a high forecast of $23.00 and a low forecast of $12.00. The average price target represents a 45.47% change from the last price of $12.03, making it a strong buy.
Cipher Mining (NASDAQ: CIFR) stock
Cipher Mining (NASDAQ: CIFR) has seen its shares rise 3.8% recently amid reports of potential takeover interest, with the stock up 69.5% since the start of the year. The company is reportedly working with advisers to gauge buyer interest, though talks are still in the early stages.
As demand for AI grows, Bitcoin miners like Cipher, with their established data center infrastructure, are becoming attractive acquisition targets. This trend is underscored by recent moves in the industry, such as CoreWeave Inc.’s offer to acquire Core Scientific (NASDAQ: CORZ) for about $1 billion.
Cipher Mining’s strategic focus on securing low-cost, fixed-price power agreements at around $0.027 per kilowatt hour positions it as one of the lowest-cost producers in the Bitcoin mining sector, significantly boosting profitability.
With a market cap of $2 billion and an enterprise value of $1.78 billion, the company maintains a strong financial footing. It has a debt-to-equity ratio of 0.02 and high liquidity, with a quick ratio and current ratio both at 8.08.
Valuation metrics further highlight Cipher’s potential. The company has a trailing P/E ratio of 107.67 and a forward P/E ratio of 21.23, reflecting its growth prospects and current undervaluation. Additionally, its price-to-book (P/B) ratio stands at 3.33.
Wall Street’s CIFR stock 12-month price target. Source: TipRanks
Based on four Wall Street analysts offering 12-month price targets, the average target for Cipher Mining is $6.50, with a high of $9.00 and a low of $5.00. This suggests a potential upside of 0.62% from its current price of $6.46.
Given these factors, Cipher Mining is considered a strong buy for investors looking to capitalize on its strategic positioning and growth potential in the AI and crypto sectors.
In conclusion, Riot Platforms and Cipher Mining are both compelling opportunities in the Bitcoin mining space. With strong financials, strategic initiatives, and positive analyst ratings, these stocks are well-positioned for growth in the coming months.
Investors should consider adding these stocks to their portfolios to take advantage of the potential upside in the rapidly evolving crypto market.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
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