Crypto stocks, such as Bitcoin miner Riot Platforms (RIOT), have surged following Donald Trump’s presidential win, with investors expecting a more favorable regulatory landscape for cryptocurrencies. Despite some infrastructure setbacks, Riot projects an impressive hash rate growth, aiming for 65.7 EH/s by 2026. In Q3 2024, Riot Platforms reported a total revenue of $84.8 million, mainly from Bitcoin mining, despite operational difficulties and fewer power credits. The company retains industry-leading financial standing with $590.6 million in working capital and holds 10,427 in unencumbered Bitcoin.
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Analysts anticipate the company will benefit significantly from a potential Bitcoin price hike, further fueling the investor’s rosy outlook. The stock is up over 18% since the election and shows no signs of slowing, making it a bandwagon crypto-friendly investors might want to hop aboard.
Riot Adjusts Hash Rate Expectations
Riot Platforms is a prominent Bitcoin mining company operating through three channels: Bitcoin Mining, Data Center Hosting, and Engineering. Riot offers co-location services for large-scale Bitcoin mining corporations and supplies the necessary infrastructure and personnel for these entities to run their miners. The company also manages data centers and computing capacity maintenance. Further, Riot designs and manufactures power distribution equipment and customized electrical products.
Riot has recently adjusted its projections for self-mining hash rate capacity. Prior estimations for the end of 2024 fell from 36.3 EH/s to the now anticipated 34.9 EH/s. This adjustment is primarily due to a delay in expanding newly acquired Kentucky facilities, which were initially expected to begin operations this year but have been deferred until 2025.
Riot also revised its hash rate capacity target for 2025, lowering it from 56.6 EH/s to 46.7 EH/s. This decrease is attributed to the prolonged expansion plans in Kentucky now being extended into 2026 and more than expected lead times for the Corsicana Facility’s next substation. As a result, only two new buildings will be operational in 2025, contrary to the initial plan for three. Despite these adjustments, Riot maintains its objective to complete the full development of the Corsicana Facility in 2026. Along with the Kentucky Facilities’ expansion plans, the company projects to reach a hash rate capacity of 65.7 EH/s by the end of 2026.
Riot’s Recent Financial Results
The company announced results for the third quarter of 2024. Revenue reached $84.79 million, improving from $70.0 million in the previous quarter and $51.9 million in the third quarter of 2023. However, it fell short of analysts’ expectations of $91.7 million. Bitcoin Mining made a revenue of $67.5 million for the quarter, driven by higher average Bitcoin prices and increased operational hash rate. The engineering revenue, however, decreased to $12.6 million for the quarter from $15.5 million for the same period in 2023. The company reported a net loss per share of -$0.54, falling short of the consensus projection of -$0.18. This marked an increase from -$0.32 in Q2 and -$0.44 from last year’s period.
The company produced 1,104 Bitcoin during the quarter, similar to the 1,106 Bitcoin mined in 2023. However, the cost to mine each Bitcoin, excluding depreciation, increased to $35,376, primarily due to a 75% decrease in power credits received in Q3 2024 and a 59% increase in the average global network hash rate. Power credits generated amounted to $12.4 million during the quarter, significantly less than the $49.6 million in the same period of 2023.
As of the quarter’s end, the company maintained a strong financial position, with $590.6 million in working capital, including $355.7 million in cash and $190.1 million in marketable equity securities.
What Is the Price Target for RIOT Stock?
The stock is highly leveraged to the price of Bitcoin and demonstrates significant volatility (beta 3.2) as a result. It has been on a roller coaster ride over the past year, climbing 30%. It trades near the middle of its 52-week price range of $6.36 – $18.75 and shows ongoing positive price momentum as it trades above all major moving averages.
Analysts following the company have been bullish on RIOT stock. For example, Stifel Nicolaus’ analyst Bill Papanastasiou, a five-star analyst according to Tipranks’ ratings, issued a Buy rating with a price target of $18 for the stock, noting its strong revenue and the potential for significant upside.
Based on ten analysts’ recent recommendations, Riot Platforms is rated a Strong Buy overall. The average price target for RIOT stock is $17.13, representing a potential upside of 14.43% from current levels.
RIOT in Review
Riot Platforms has experienced significant growth despite operational challenges and revised hash rate capacity projections. While encountering infrastructural delays and fewer power credits, the stock continues upward, fueled by the recent presidential election. The company is well-positioned to reap additional benefits from a potential Bitcoin price increase, and the pursuit of reaching a hash rate capacity of 65.7 EH/s by 2026 reinforces its commitment to being an industry-leading operation in Bitcoin mining. Investors may find this stock a compelling alternative to directly owning the cryptocurrency.
