Bitcoin mining analyst sees significant organic growth opportunities for Riot stock

Bitcoin mining company Riot Platforms’ stock could be a buy due to its significant organic growth opportunities, says HC Wainwright analyst Mike Colonnese.

Riot Platforms stock is down 34% year-to-date amid a broader correction for Bitcoin (BTC) and altcoins, with crypto stocks also falling. However, in a research note shared with crypto.news, Colonnese argues that the bitcoin mining stock is likely to see further growth as it aims to expand.

He reiterated his buy rating on RIOT with a target price of $17.

Riot’s financial results

Riot released its second-quarter results on July 31, announcing significant operational growth during the quarter. Riot CEO Jason Les also emphasized that the company is making progress on its long-term growth strategy.

According to HC Wainwright’s Colonnese, Riot “officially raised its 2024 and 2025 outlook and reported its highest-ever 2Q24 results.” While the financials were mixed, the analyst noted that they beat estimates on several metrics, including stronger engineering revenue. Riot also exceeded its hash rate guidance for the quarter, reaching 21.4 exahashes per second.

Colonnese added that the 77% quarter-over-quarter growth in the three months ending June 30 meant Riot reached 22 EH/s, the fastest growth rate in hashrate for public miners tracked by HC Wainwright.

Expansion efforts

The bullish predictions for RIOT also come as the miner aims to further expand its capacity. Riot recently acquired Kentucky-based BTC miner Block Mining.

This acquisition will help Riot continue on track to meet its growth targets for 2024 and 2025.

Despite the challenges it faced in its plans to acquire Bitcoin miner Bitfarms, Riot is on track for success.

The company is well positioned for the next 18 months, according to the HC Wainwright note, primarily due to its balance sheet having over $1 billion in liquidity compared to its estimated $694 million capital expenditure requirement by the end of 2025.

“With low power costs, good scale, and a strong balance sheet, we believe Riot is competitively positioned to benefit from the next leg of the bull market cycle for BTC,” the analyst concluded.

Riot’s end-2024 goal is for the hashrate to reach 36.3 EH/s and 56.6 EH/s by the end of 2025.

Meanwhile, RIOT stock was trading at around $9.97 on August 1, 2024, down 2.2% at 10:27 UTC.