On Wednesday, H.C. Wainwright maintained a Neutral rating and a $3.50 price target on HIVE Blockchain (TSXV:HIVE) Technologies Ltd. (NASDAQ: NASDAQ:HIVE), following the company's recent announcement of its fiscal year results.
HIVE reported that its total revenue for the fiscal year ending March 31, 2024, saw an 8% year-over-year increase to $114.5 million, slightly above the firm's estimate of $114.1 million. This growth was attributed to higher Bitcoin (BTC) prices, despite a 4% decline in BTC production to 3,123 BTC for the year.
HIVE's adjusted EBITDA for the fiscal year was reported at $37.5 million, which translates to a 33% margin, exceeding the $35.4 million and 31% margin estimated by H.C. Wainwright. The company's capacity increased by over 50% year-over-year to 4.7 EH/s as of March 31, 2024. However, due to the network hash rate growing by approximately 75% during the same period, HIVE experienced a modest decrease in production.
Looking ahead, HIVE aims to expand its total hash rate to 5.5 EH/s by the end of July 2024, up from 5 EH/s at the end of May. The company also anticipates an average fleet efficiency of 25 J/TH upon the complete deployment of recently acquired S21 and S21 Pro miners from Bitmain at its data centers. These upgrades are expected to improve fleet efficiency significantly from the previous metric of over 30 J/TH.
Additionally, HIVE is scaling its High-Performance Computing (HPC) business, which accounted for approximately 5% of total revenues in the fourth fiscal quarter and is currently generating $7.2 million in annualized run rate revenues. The company estimates that it can reach $20 million in annualized HPC revenues in the second half of the calendar year 2024.
Despite acknowledging HIVE's high operational uptime, lean expense base, and recent improvements to its mining fleet, H.C. Wainwright remains cautious. The firm's stance is influenced by the broader Bitcoin mining economics, highlighting that lower hash prices, currently at $0.048/TH/day, could significantly impact miners with less scale and higher power costs. Therefore, the firm awaits a sustained improvement in the sector before changing its position on the stock.
InvestingPro Insights
As HIVE Blockchain Technologies continues to navigate the dynamic cryptocurrency landscape, recent data from InvestingPro provides valuable context for investors. The company's market capitalization stands at $350.75 million, reflecting its position in the market. Despite a challenging period, with the stock experiencing a significant decline over the last six months, recent performance data shows a 13.69% return over the last month, hinting at a potential turnaround for HIVE's market sentiment.
An InvestingPro Tip highlights that HIVE operates with a moderate level of debt, which could provide some financial flexibility amidst the volatile revenue streams common in the crypto sector. Additionally, while HIVE has not been profitable over the last twelve months, it's worth noting that the company's liquid assets exceed short-term obligations, suggesting a degree of financial stability in the near term.
For those considering an investment in HIVE, it may be beneficial to explore the additional 9 InvestingPro Tips available, which provide deeper insights into the company's financial health and market performance. Interested investors can take advantage of a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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