Argo Blockchain’s Q1 Revenues Improve on Higher Hash Rate

Argo Blockchain plc (ARBK) has reported mixed results for the first quarter of 2022. Its revenues improved year-over-year but earnings declined.

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The company provides access to mining rigs, which perform the complex crypto-mining operations for its users and then directly deposit all coins mined into users’ digital wallets. Shares of ARBK have tanked 49.7% so far this year.

Results in Detail

Argo reported first-quarter revenues of $19.5 million, up 9% from the same quarter last year. The upside can be attributed to a higher hash rate, partly offset by lower Bitcoin prices.

Net income for the quarter declined 91.8% year-over-year to $2.07 million, due to a decline in the fair value of digital currencies during the quarter. The company reported earnings per share of $0.004, compared with $0.07 in the first quarter of 2021.

In the first quarter, Argo mined 470 Bitcoins and Bitcoin Equivalents (BTC), up 21% from 387 BTC mined in the same quarter last year. With an average direct cost per BTC mined of $9,779, the mining margin for the first quarter stood at 76%.

The CEO of Argo, Peter Wall, said, “We already have a strong foundation for growth at Helios with our access to 800 MW of power capacity. This quarter, we improved our access to capital by establishing a financing relationship with NYDIG and strengthened our access to miners through our supply agreement with Intel for their new Blockscale ASIC chips. This will allow us to build custom-designed mining machines specifically to Argo’s specifications and built for use in immersion-cooling technology.”

Stock Rating

Overall, the Street is bullish on the stock and has a Strong Buy consensus rating based on six Buys and one Hold. Argo’s average price target of $16.50 implies upside potential of about 158.2% from current levels.

Conclusion

The crypto miner’s target to increase the hash rate and power capacity at Helios is likely to support its revenue growth. However, the falling BTC price remains a drag. Nevertheless, bullish analysts’ sentiments and triple-digit upside potential infuse optimism in the stock.

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