On Monday, ATB Capital Markets confirmed its Outperform rating and $21.00 price target for Riot Platforms (NASDAQ:RIOT), a cryptocurrency mining company. The endorsement follows Riot's latest monthly production report and operations update, which revealed significant progress in the company's mining capabilities.
Riot Platforms reported mining 412 Bitcoin (BTC) in September, marking a 90 BTC month-over-month increase. This growth is attributed to an enhanced operational hash rate. By the end of September, Riot achieved a deployed hash rate of 28.2 exahashes per second (EH/s), which aligns with their third-quarter target of 28.1 EH/s.
The company also received $2.2 million in total power credits for September, a decrease from the $6.4 million received in the previous month. Despite this reduction, Riot managed to maintain a net cost of power at $0.035/kilowatt-hour (kWh) across both its Rockdale and Corsicana facilities, resulting in a combined cost of power at the same rate.
Furthermore, Riot completed the development of its third 100 megawatt (MW) building, Building B1, at the Corsicana site in September. This expansion increases the facility's power capacity to 300 MW. Development continues on the final building of Phase 1, Building B2, which is anticipated to be finished and operational in November.
ATB Capital Markets views Riot's achievement of the Q3 hash rate milestone and its ability to produce BTC at a cost of $0.035/kWh as positive developments. The firm also supports Riot's reiterated year-end 2024 hash rate guidance of 36 EH/s, considering the ongoing expansion of the Corsicana facility as a factor that will contribute to reaching this goal.
In other recent news, Riot Platforms, a significant player in Bitcoin mining, reported substantial progress in its operations and financials. The company achieved a significant milestone by producing 412 Bitcoin in September, marking a 28% rise from August and a 14% increase from the same month last year. 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 also reported revenues of $70 million, surpassing projections, although the adjusted EBITDA was notably lower than the anticipated $16 million. Riot Platforms and Bitfarms, both significant entities in the cryptocurrency mining industry, reached a settlement agreement, leading to changes in Bitfarms' Board of Directors.
Analysts from Macquarie and Stifel Canada initiated coverage on Riot Platforms with an Outperform and a Speculative Buy rating respectively, indicating a positive outlook for the company. Needham maintained a Buy rating on the company.
InvestingPro Insights
Complementing ATB Capital Markets' positive outlook on Riot Platforms, recent data from InvestingPro provides additional context to the company's financial position and market performance. As of the last twelve months ending Q2 2024, Riot's revenue stood at $280.02 million, with a revenue growth of 9.21%. This aligns with the InvestingPro Tip indicating that analysts anticipate sales growth in the current year.
Despite the recent production improvements highlighted in the article, Riot's stock has experienced significant volatility. An InvestingPro Tip notes that the stock price has taken a big hit over the last six months, which is reflected in the 27.09% decline in the 6-month price total return. However, with a price-to-book ratio of 0.91, the stock may be trading at a discount relative to its book value.
Investors should note that while Riot is expanding its operations, it's also facing challenges. The company's gross profit margin stands at 18.58%, which supports the InvestingPro Tip suggesting that Riot suffers from weak gross profit margins. This could be a factor to watch as the company continues to scale its mining operations.
For those interested in a deeper analysis, InvestingPro offers 13 additional tips for Riot Platforms, providing a more comprehensive view of the company's financial health and market position.
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