On Thursday, H.C. Wainwright maintained a Buy rating on Riot Platforms (NASDAQ:RIOT) with a $17.00 price target. The firm acknowledged Riot's mixed third-quarter results, which were announced after the market closed on Wednesday.
The company reported higher Engineering revenues, which surpassed estimates, but its adjusted EBITDA missed expectations due to unexpectedly high SG&A expenses. Riot also revised its hash rate projections downward for both 2024 and 2025, a development that is expected to impact the stock today.
Riot Platforms has demonstrated significant progress in expanding its operations, particularly with its Phase 1, 400 MW expansion at Corsicana. Since the beginning of the year, the company completed and powered up the third 100 MW building at the site in September. Additionally, the final 100 MW building is anticipated to be fully operational by the end of this year.
Despite Riot's stock underperforming within its sector in 2024, H.C. Wainwright suggests that the company's rapid growth in deployed capacity, which saw a 127% EH/s increase year-to-date, along with recent operational efficiency improvements, positions it favorably. Riot's operational uptime improved significantly to approximately 80% in October, compared to a historical average of around 65-70%.
H.C. Wainwright's stance is that these advancements indicate a critical turning point for Riot Platforms. The firm expects that the company's expansion efforts and operational enhancements will lead to positive outcomes for shareholders in the forthcoming quarters. This perspective underpins the reiterated Buy rating on the stock.
In other recent news, Riot Platforms, a prominent player in the Bitcoin mining industry, has made significant strides in its operations and financials. The company reported mining 412 Bitcoin in September, a marked increase from previous months, and achieved a deployed hash rate of 28.2 exahashes per second (EH/s).
Riot Platforms also reported revenues of $70 million, exceeding projections, despite an adjusted EBITDA lower than the anticipated $16 million.
The company continues to expand its Corsicana facility, recently completing the development of its third 100 megawatt (MW) building, increasing the facility's power capacity to 300 MW. Analysts from ATB Capital Markets, Macquarie, and Stifel Canada have expressed positive outlooks for Riot Platforms, confirming Outperform and Speculative Buy ratings respectively, while Needham maintained a Buy rating.
These recent developments also include a settlement agreement with Bitfarms, a fellow entity in the cryptocurrency mining industry, leading to changes in Bitfarms' Board of Directors. Riot Platforms' total Bitcoin holdings now stand at 10,427, reflecting a 4% increase from August and a 42% surge year-over-year.
The company has also removed its data center hosting segment from reportable business segments, following the termination of all contracts with the company's data center hosting and colocation customers.
InvestingPro Insights
Riot Platforms' recent operational developments align with several key metrics and insights from InvestingPro. The company's market capitalization stands at $3.18 billion, reflecting its significant presence in the cryptocurrency mining sector.
InvestingPro data shows that Riot's revenue for the last twelve months as of Q2 2024 was $280.02 million, with a growth rate of 9.21%. This growth, albeit modest, supports H.C. Wainwright's positive outlook on the company's expansion efforts.
Two relevant InvestingPro Tips highlight Riot's financial position and growth prospects:
1. Riot holds more cash than debt on its balance sheet, which could provide flexibility for further expansion and operational improvements.
2. Net income is expected to grow this year, aligning with the analyst's expectation of positive outcomes for shareholders in upcoming quarters.
These insights complement the article's focus on Riot's operational expansion and efficiency improvements. For investors seeking a deeper understanding of Riot Platforms' financial health and growth potential, InvestingPro offers 14 additional tips, providing a comprehensive analysis to inform investment decisions.
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