Bit Digital stock holds Buy rating, $7 target from H.C. Wainwright

On Monday, H.C. Wainwright reaffirmed a Buy rating and a $7.00 price target on shares of Bit Digital Inc. (NASDAQ:BTBT), representing nearly 300% upside from the current price of $1.78. According to InvestingPro data, the company maintains strong financial health with a 5.39x current ratio and holds more cash than debt on its balance sheet. The firm’s analysts highlighted the company’s recent strategic moves and a material definitive agreement as evidence of successful execution. The agreement, valued at $53.2 million and disclosed in an April 16 8-K filing, is viewed as a significant step in Bit Digital’s expansion in the high-performance computing (HPC) hosting and cloud services sector.

Bit Digital’s deal, announced on April 10, is expected to add approximately 20MW of capacity, propelling the company towards its 32MW target for 2025. The expansion comes as the company demonstrates strong revenue growth, with InvestingPro data showing a 139% increase in the last twelve months to $107.5 million. The analysts deduced the deal’s size based on the company’s fourth-quarter earnings call, noting that subtracting the cumulative total megawatt capacity of Bit Digital’s three Quebec sites leaves an estimate of nearly 20MW. This acquisition is strategically located near three major metropolitan areas—Charlotte, Greensboro, and Raleigh-Durham, North Carolina—and not far from Richmond, Virginia, enhancing its value due to proximity advantages for low-latency AI applications.

The analysts speculated that the lower purchase price might be due to Bit Digital’s preference for brownfield sites, which offer cost savings and quicker market access, despite likely requiring renovations. The Madison, North Carolina site also includes additional benefits such as water and fiber access, as well as expansion potential, pending an energy study to determine maximum load capacity.

Bit Digital’s transformation from a cryptocurrency miner to a provider of HPC hosting and cloud services is underscored by a growing customer base, which includes 13 at one site and others such as DNA Holdings Venture’s AI Compute Fund, Cerebras, Boosteroid, and an initial customer outside the hyperscaler industry. With the deal’s expected closure by mid-May, H.C. Wainwright has opted not to adjust its estimates at this time, maintaining its $7 price target and Buy rating on Bit Digital, which remains one of the firm’s top picks for 2025. For investors seeking deeper insights, InvestingPro offers an extensive analysis of Bit Digital’s financials, including 13 additional ProTips and a comprehensive Pro Research Report, helping investors make informed decisions about this rapidly evolving company in the dynamic HPC sector.

In other recent news, Bit Digital, Inc. reported impressive fourth-quarter earnings for 2024, with an earnings per share (EPS) of $0.11, surpassing the expected -$0.04. The company’s revenue also exceeded forecasts, reaching $26.1 million against the anticipated $25.82 million. Bit Digital experienced a significant revenue growth of 141% in FY24, totaling $108.1 million, as noted by H.C. Wainwright, which maintained its Buy rating and a $7 price target for the company. The firm highlighted the successful transition towards high-performance computing (HPC) as a key growth catalyst, with the WhiteFiber platform expanding its enterprise client base significantly.

Additionally, Bit Digital announced the acquisition of a new data center site in Saint-Jérôme, Québec, to support its partnership with Cerebras Systems. This facility, part of the WhiteFiber high-performance computing platform, is under development with costs projected around CAD $55 million (approximately $40 million USD). The site is expected to be operational by July 2025, and the agreement includes a five-year colocation deal with Cerebras for 5MW of custom infrastructure.

Moreover, Bit Digital’s subsidiary, WhiteFiber, has partnered with Shadeform to provide on-demand access to NVIDIA (NASDAQ:NVDA) B200 GPUs, starting in April. This strategic collaboration aims to offer advanced AI infrastructure across over 100 regions, enhancing accessibility and eliminating high upfront costs for developers. Bit Digital continues to caution investors about potential risks, including those related to its former operations in China, despite having ceased operations there as of September 30, 2021.

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