Shares of Mara Holdings (MARA) have surged following a significant earnings surprise, as the digital asset tech company posted earnings per share that were double that of analyst expectations. This impressive outcome was driven by a 37% boost in revenue to an all-time high of $214.4 million, far exceeding analysts’ projections. Despite a slight drop in bitcoin mined during Q4 compared to last year, Mara offset this by increasing its total blocks won by 25% to 703 blocks during the quarter.
A Shift in Strategy
Mara Holdings is a player in the digital asset sector, primarily focusing on bitcoin mining. The company recently enlarged its energy capacity by securing 1.2 GW at competitive rates and acquiring a wind farm, lessening its dependence on grid power. It is pursuing a strategy of becoming a vertically integrated energy and technology solutions provider, shifting from an asset-light to an asset-heavy business model through its infrastructure acquisitions.
The company has recently completed the acquisition of a wind farm located in Hansford County, Texas. The location, equipped with 240 megawatts of interconnection capacity and 114 megawatts of nameplate wind capacity, marks a significant milestone in MARA’s transformation strategy. With this acquisition, MARA increased its owned and operated generating capacity to 136 megawatts, bolstering its position in energy generation and bitcoin mining.
The wind farm will repurpose mining hardware that could otherwise have been discarded or sold into the secondary market and use it to harness 100% renewable energy, reducing bitcoin production costs and reinforcing MARA’s dedication to sustainability. The move promises to extend the ASIC miners’ economic lifespan and decrease operational costs.
Dramatic Financial Growth
In its recently released Q4 financial report, the company noted a significant increase in financial performance. Revenue rose 37% to $214.4 million, net income also showed substantial growth of 248% to $528.3 million, and adjusted EBITDA shot up by 207% to $794.4 million.
The company saw bitcoin holdings increase 197%, reaching 44,893 BTC (approximately $4.6B) by year-end. In the fourth quarter alone, the company mined 2,492 BTC and purchased 15,574 BTC utilizing cash and the proceeds from their zero-coupon convertible senior notes offering. The BTC yield per share for 2024 was 62%.
Analyst Views are Mixed
Analysts following the company have taken divergent views of the stock. On the more bullish end of the spectrum, H.C. Wainwright’s Kevin Dede reiterated a Buy rating with a $28 price target, noting Mara’s strategic growth and operational efficiency. He observed that the company has made substantial advancements in infrastructure, transitioning to an asset-heavy model that has significantly improved its data center capabilities and energy capacity. Projected growth for 2025 is expected to be supplemented by diversified revenue streams from integrating Bitcoin mining operations and advanced data centers.
Mara Holdings is rated a Hold overall, based on the recent recommendations of nine analysts. The average price target for MARA stock is $26.17, which represents a potential upside of 99.31% from current levels.
