On Wednesday, Cantor Fitzgerald increased the stock price target for Marathon Digital Holdings (NASDAQ:MARA) to $33.00, up from the previous $21.00, while sustaining an Overweight rating. The firm's decision follows Marathon Digital's recent financial report, which showed a year-over-year revenue increase of 34.5%, reaching $131.6 million for the quarter.
Marathon Digital has achieved a new milestone by becoming the first Bitcoin mining company to surpass a hash rate of 40.2 EH/s as of October 30. The company is also on track to meet its goal of a 50 EH/s hash rate by the middle-to-end of December.
Despite reporting an adjusted EBITDA of negative $8.2 million for the quarter, reflecting an adjusted EBITDA margin of negative 6.3%, the company's strategic growth and innovations in the sector have led to the raised price target.
The analyst highlighted Marathon Digital's position as a leader in Bitcoin mining innovation, citing the company's recent surge in Bitcoin prices and its status as the second-largest owner of Bitcoin, following MicroStrategy (NASDAQ:MSTR). The value of Marathon Digital's Bitcoin holdings has reportedly increased by approximately $500 million due to the recent uptick in Bitcoin prices.
Further developments include Marathon Digital's first external orders for its two-phase immersion cooling (2PIC) tanks and the deployment of these tanks within its infrastructure. The company also launched 25 MWs of micro data centers designed to mine Bitcoin using flare gas from oil fields, which is a cost-effective energy source at $0.01/kWh. This venture is seen as a scalable opportunity for the company going forward.
Marathon Digital's strategic acquisitions have been a key part of its verticalization strategy. With its latest acquisition on November 11, the company has increased its owned infrastructure to 65% of its portfolio, which is expected to significantly enhance its mining margins by reducing reliance on more costly hosting arrangements.
The firm concluded by reiterating its Overweight rating and increasing the 12-month price target to $33, reflecting confidence in Marathon Digital's continued innovation and strong positioning within the evolving Bitcoin mining ecosystem and energy markets.
In other recent news, Marathon Digital Holdings reported its third-quarter financial results, revealing a revenue of $131.6 million, a slight decrease from the preceding quarter.
However, the company saw a significant increase in its energized hash rate, a measure of computational power used in cryptocurrency mining, and a decrease in cost per petahash per day, indicating improved efficiency. H.C. Wainwright, following these developments, adjusted its price target for Marathon Digital from $27.00 to $28.00, maintaining a Buy rating on the stock.
In addition to these financial results, Marathon Digital announced the acquisition of approximately 372 megawatts of capacity across three sites in Ohio, a move expected to increase its total nameplate capacity to nearly 1.5 gigawatts. This acquisition is part of the company's strategic focus on Bitcoin investment, with nearly 27,000 Bitcoin valued at roughly $2.5 billion in its holdings.
The company's CEO, Fred Thiel, and CFO, Salman Khan, emphasized reducing operational costs, leveraging partnerships for lower electricity rates, and a disciplined acquisition strategy for financial flexibility. These strategies, along with a hybrid approach to Bitcoin investment, are expected to drive Marathon Digital's growth.
Despite challenges in the competitive AI and HPC hosting market, Marathon Digital remains committed to delivering high-value solutions and scaling operations through partnerships and innovative technology in miner hardware. These are among the recent developments in Marathon Digital Holdings.
InvestingPro Insights
Marathon Digital Holdings (NASDAQ:MARA) continues to demonstrate strong growth and innovation in the Bitcoin mining sector, as reflected in the recent analyst upgrade. This positive outlook is further supported by real-time data from InvestingPro.
The company's revenue growth is particularly impressive, with InvestingPro data showing a substantial 224.69% increase in the last twelve months as of Q2 2024. This aligns with the analyst's observation of the company's 34.5% year-over-year revenue increase in the most recent quarter.
InvestingPro Tips highlight that analysts anticipate sales growth in the current year, which is consistent with Marathon Digital's expanding operations and increased hash rate. Additionally, the company is trading at a low P/E ratio relative to near-term earnings growth, suggesting potential undervaluation despite recent price increases.
The stock's recent performance has been remarkable, with InvestingPro data showing a 30.59% return over the last week and a 56.9% return over the last month. This aligns with the analyst's mention of the recent surge in Bitcoin prices benefiting Marathon Digital's holdings.
For investors seeking a deeper understanding of Marathon Digital's financial health and market position, InvestingPro offers 18 additional tips, providing a comprehensive analysis to inform investment decisions.
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