Bitfarms stock earns analyst praise after ‘transformational’ deal

HC Wainwright analyst Mike Conesse described Bitfarms’ deal to acquire Stronghold Digital Mining as a “transformational acquisition.”

The analyst commented on the potential for the Bitcoin (BTC) miner to benefit from the Stronghold acquisition in a note shared with crypto.news on Aug. 22. The statement came a day after Bitfarms’ announcement on Aug. 21.

Conesse sees the $125 million all-stock deal for Stronghold as a significant opportunity for Bitfarms to significantly expand its operations over the next 16 months. Once completed in the first quarter of 2025, Stronghold’s power capacity will allow Bitfarms to approach 1 gigawatt of power by the end of the year.

“Following the integration and expansion of Stronghold’s assets, Bitfarms will more than triple its total capacity from 310 MW in operation at the end of Q2 2024 to 955 MW by 2025,” the analyst wrote.

Additionally, the deal is expected to increase Bitfarms’ U.S. footprint to approximately 47% of its total portfolio, up from the current 6%. The expansion of Stronghold’s Pennsylvania sites could also contribute an additional 23 EH/s to the expected 35 EH/s growth by the end of 2025, a target Bitfarms set before announcing the Stronghold acquisition.

Repeat buy with $4 price target

Given the above outlook, HC Wainwright believes Bitfarms stock is undervalued. Key catalysts for 2025 include a significant upgrade to the mining firm’s fleet and potential organic growth.

The analyst reiterated a buy rating on BITF with a $4 price target. Bitfarm stock is currently trading at around $2.28, implying a 75.4% upside potential. BITF is up 22% following Bitfarm’s Q2 2024 results.

Factors that could impact reaching this price target include Bitcoin price volatility, operational delays, changes in network hashrate, and the possibility of equity weakness.