Hut 8 Boosted by Next-Gen Bitcoin Rigs and Revenue Diversification, Analysts Say

Analysts Say Hut 8 Is Fueled by Next-Gen Bitcoin Platforms and Revenue Diversification

Hut 8 Corp (NASDAQ:HUT) stock was trading lower in early trading Tuesday after the company reported mixed second-quarter earnings. The stock price pulled back on Wednesday.

The results come amid an exciting earnings season. Here are some key analyst takeaways.

Benchmark analyst Mark Palmer reiterated a Buy rating on Hut 8 Mining and set a price target of $17.

Needham analyst John Todaro maintained a Buy rating on Hut 8 Mining with a $15 target price.

Benchmark: Hut 8 Corp.’s second-quarter revenue of $33.5 million fell well short of the $48.0 million consensus estimate. Palmer noted that its adjusted EBITDA missed the consensus estimate by a wide margin due to a $71.8 million loss in bitcoin holdings by market value at the end of the first quarter compared to the end of the quarter.

However, without the impact of Hut 8 Corps’ mark-to-market valuation, adjusted EBITDA would have been $14.3 million, higher than the Street estimate of $9 million.

The analyst attributed the market’s initial negative reaction to Q2 financial results to the company’s top-line and bottom-line net income figures missing market estimates.

He noted that a closer evaluation of the stock revealed several promising results, especially when considered in the context of comments made by CEO Asher Genoot during this morning’s earnings call.

Palmer said Hut 8 has been bucking the trend in bitcoin mining since the beginning of the year, delaying orders for new mining rigs and instead opting to focus on growing its power footprint and restructuring its operations.

Palmer added that the prospect of Hut 8 Corp’s reduced costs combined with the efficiency of its next-generation mining platforms significantly outweighed the impact of the mediocre quarterly data.

Palmer forecast third-quarter revenue of $44.6 million and adjusted EBITDA of $20.6 million.

Needham: The rerating reflected revenue diversification, cost reductions, and improved fleet operations, which should increase mining efficiency, operational leverage, and a cleaner balance sheet than market warrants given its large Bitcoin holdings.

Todaro reported modest adjusted EBITDA, supported by top-line growth and a higher ratio of non-cash stock-based compensation (SBC) to cash general and administrative expenses (G&A).

Revenue of $35 million missed Needham’s estimate of $44 million. Adjusted EBITDA of $14 million beat Needham’s estimate of $6 million.

Todaro noted that the company is focused on developing an achievable 200MW site for High-Performance Computing rather than 1GW+ in the near term.

The story continues

Hut 8 Corp has been in talks with potential HPC customers, including hyperscalers, and the customer is reviewing existing and planned sites.

Todaro noted that an HPC site, whether a new build from scratch or a renovation, would arrive in Q1 2026 at the earliest. The analyst noted multiple expansions after receiving additional details on fiscal 2025 hash growth and a hyperscaler Letter of Intent.

Todaro forecast third-quarter revenue of $51 million and adjusted EBITDA of $11 million.

Price Action: HUT stock was up 1.73% at $11.15 at last check on Wednesday.

Photo via Shutterstock

Latest Ratings for HUT

History

Firm

Action

From

With

November 2021

Canaccord’s Sincerity

Protects

To buy

November 2021

H. C. Wainwright and Company

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To buy

November 2021

H. C. Wainwright and Company

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To buy

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This article Hut 8 Powers Up With Next-Gen Bitcoin Platforms, Revenue Diversification, Says Analysts was first published on Benzinga.com

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