Key Points
- H.C. Wainwright analyst Mike Colonnese recommends buying Riot Platforms’ stock due to potential growth opportunities.
- Riot Platforms is expanding its capacity and has exceeded financial estimates in several metrics.
Mike Colonnese, an analyst from H.C. Wainwright, has endorsed Riot Platforms’ stock. He sees substantial potential for growth in the company.
Despite a 34% drop in Riot Platforms’ stock value this year, due to a broader correction in Bitcoin (BTC) and altcoins, Colonnese maintains a positive outlook. He argues that the company’s plans for expansion will drive further growth.
Riot’s Financial Performance
Riot announced its Q2 results on July 31, showing significant operational growth. The company’s CEO, Jason Les, emphasized progress in Riot’s long-term growth strategy.
Colonnese noted that Riot had raised its outlook for 2024 and 2025 and reported strong Q2 results. Despite mixed financial results, Riot exceeded expectations in several areas, including engineering revenues. The company also outperformed its hash rate guidance for the quarter, hitting 21.4 exahashes per second.
The company’s quarter-on-quarter growth of 77% in the three months ending June 30 resulted in Riot achieving 22 EH/s. This is the fastest growth rate in hashrate among public miners tracked by H.C. Wainwright, according to Colonnese.
Expansion Plans
Riot is planning to expand its capacity. The company recently acquired Kentucky-based BTC miner, Block Mining. This acquisition is expected to help Riot meet its growth objectives for 2024 and 2025.
Despite facing challenges in its plans to acquire Bitcoin miner Bitfarms, Riot is still on track for success. According to H.C. Wainwright, the company is well-positioned for the next 18 months. A key factor is its balance sheet, which shows over $1 billion in liquidity against an estimated $694 million in capex requirements through 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,” Colonnese concluded. Riot expects to grow its hashrate to 36.3 EH/s by the end of 2024 and 56.6 EH/s by the end of 2025.
As of August 1, 2024, the RIOT stock was trading around $9.97, down 2.2% at 10:27 am ET.
