Bitcoin
Hut 8 (HUT) Bitcoin (BTC) Stack Provides Capital to Pursue Upcoming Projects, Upgrade to Buy: Craig-Hallum
Bitcoin miner Hut 8’s (HUT) stack of more than 9,100 coins provides substantial capital to pursue future projects, broker Craig-Hallum said in a research report upgrading the stock to buy. The company’s bitcoin inventory is worth about 75% of its current market value and “represents both a protective asset for investors and very opportunistic capital for the business to use to grow,” said the analyst team led by George Sutton .
The brokerage raised its Hut 8 rating from hold to buy while maintaining its $12 price target. Shares closed more than 13% higher at $8.83 on Wednesday after earnings, with a big jump in the price of bitcoin. (BTC) also providing a favorable wind. Shares rose 2% in early Thursday trading.
“Over the past 18 months, we have maintained a cautious view of HUT, considering its challenges with mining operations, contracts, strategy and management,” Sutton and his team wrote, adding that with these issues being addressed, the “potential for growth and appreciation of the shares far outweighs the risks.”
“We are particularly optimistic about the company’s strategic partnerships with leading energy suppliers and its progress through the regulatory investigation process, which we believe will further enhance its potential,” they added.
The company’s pipeline includes not only bitcoin mining opportunities, but also high-performance computing (HPC) and artificial intelligence (AI) chances, the report said, noting that HUT is entering the AI services market later this year , with annual revenue from this contract expected to be US$20 million.
O Validus assets, four natural gas plants in Ontario that were acquired by the previous management team, will prove to be another source of cash, the broker added. The company reported first room earnings yesterday and said net profit was $250.9 million versus $17.3 million a year earlier.