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2 ‘Strong Buy’ Cryptomining Stocks With Triple-Digit Upside
Stock Analysis & Ideas

2 ‘Strong Buy’ Cryptomining Stocks With Triple-Digit Upside

The connection between bitcoin/crypto and the stock market comes in different forms, one of which is via the cryptomining companies. These are firms that specialize in developing the infrastructure needed to extend the digital blockchain: the high-end, high speed server systems, capable of calculating the blockchain equations; the real estate, comprising land and buildings needed for data centers; the electrical and cooling technology needed to keep the servers in operation. All of this is expensive, and by going public these companies can raise the capital they need to fund operations.

In a note for JPMorgan, analyst Ken Worthington took a look at the crypto markets and at the crypto miners, with the analyst predicting more adoption for this fast-growing industry.

“The cryptomarkets had a big year in 2021 and we see likelihood for greater acceptance by mainstream investors and companies in 2022,” Worthington wrote, before adding, “Bitcoin as a digital currency has value in that it is highly efficient to own and transact – anywhere in the world in 30 minutes or less. But its nature as a digital asset contains a number of attributes that makes Bitcoin valuable as digital scarcity and as a better store of value often referred to a digital gold.”

Keeping that background in mind, we can turn to the cryptominers. This is where investors can buy shares in their own digital gold mines. Using the TipRanks platform, we’ve pulled up data on two cryptomining companies which have received the thumbs up from Street analysts; both are rated as Strong Buys while the experts also see plenty of upside on the horizon. Let’s take a closer look.

Core Scientific (CORZ)

The first stock we’re looking at, Core Scientific, is one of the largest bitcoin miners in North America. The company has operations in Georgia, Kentucky, North Carolina, and North Dakota; its operations include fully integrated self-mining of digital currency assets. Core Scientific’s cryptomining facilities have a 100% carbon-neutral footprint, and while they use enormous amounts of electricity, between 55% and 60% of their power needs come from sustainable sources, including solar, wind, and hydro. Core Scientific currently mines seven different digital currencies, including Bitcoin, Ethereum, Monero, and Litecoin.

In the company’s most recent operations update, for January 2022, Core Scientific reported producing 1,077 bitcoins for the month – the second month in a row that it had generated 1,000+ crypto coins. This production represented a 315% yoy increase in crypto coin generation, and brought the company’s total holding in bitcoins to 6,373 as of January 31.

Core Scientific generates these bitcoins through its fleet of cryptomining rigs, totaling 75,000 bitcoin miners with a total hash rate of 7.5 EH/s. The company also provides services for third-party miners, including infrastructure, technology, and ops support. These services represent a total of 7.1 EH/s.

In January of this year, Core Scientific both entered the public market and raised capital through completion of a SPAC merger with Power & Digital Infrastructure Acquisition Corporation. The merger, completed on January 20, brought $222 million in gross proceeds.

In coverage of Core Scientific for B. Riley Securities, 5-star analyst Lucas Pipes writes, “While public digital asset miners typically focus on self-mining, Core has a well-established presence in both self-mining and hosting with a capacity of 7.5 EH/s on its own account and roughly 7.1 EH/s hosted at its data centers. We expect the company’s growth initiatives over the next 12 months to sustain this diversified approach. In our opinion, this is a “best of both worlds” strategy that enables Core to enjoy the growth potential of self-mining but with reduced earnings volatility. Longer-term, we believe this diversified business model will also offer greater economies of scale and scope. We consider Core to already be one of the most sophisticated data center operators in the industry, likely opening multiple future avenues of growth for the company.”

The analyst’s comments support his Buy rating on CORZ, and his $15 price target implies a robust one-year upside of 90%. (To watch Pipes’ track record, click here.)

In its short time on the public markets, this stock has picked up 3 analyst reviews – and they are unanimously positive, for a Strong Buy analyst consensus. Shares in CORZ are priced at $7.85 and their $17.25 average price target suggests a strong 120% upside potential for the year ahead. (See Core Scientific’s stock forecast at TipRanks.)

Argo Blockchain (ARBK)

Now will shift our view to Argo Blockchain, a London-based cryptomining company with major operations in the North American market. The company’s main bitcoin mining centers are located in Quebec and Texas; in Quebec, the Baie Comeau facility consumes approximately 15 megawatts of power, from hydroelectric sources, and totals 40,000 square feet. The larger Helios facility, in Dickens County, Texas, totals 100,000 square feet of data center space and is in process of being built up to 800 megawatts of capacity. Currently, Argo operates 45 megawatts of mining machines, with a hash rate of 1.605 EH/s.

This past January, Argo reported mining a total of 172 Bitcoin. This was down from December – but still generated $7.1 million in monthly revenue. As of January 31, Argo owned a total of 2,748 Bitcoin generated by its mining activities.

The company went public on the US markets in the fall of last year, selling 7.5 million American Depositary Shares and entering the NASDAQ index on September 23. The stock sale raised $112.5 million in gross capital, and the shares closed their first day at $16.75. The stock has declined since then, and is currently down by 50% compared to its debut.

H.C. Wainwright analyst Kevin Dede notes that Argo is making headway on its build-out in Texas, which has potential to become one of North America’s largest bitcoin mining data centers. In a recent note, he quantifies this, writing, “…it appears that Argo’s flagship mining facility is making progress toward its first-half 2022 targeted debut. The initial 200MW of power at the site’s first building is but 25% of the eventual 800MW that could eventually power Argo’s 320 acre plot where the entire facility may cost in the range of $1.5-2.0 billion, power as many as 250,000 miners, and deliver 22-26 EH/s, by our rough estimates…”

Dede rates ARBK as a Buy, with a $25 price target to indicate potential for 207% share appreciation by the end of this year. (To watch Dede’s track record, click here.)

Argo’s Strong Buy consensus rating is unanimous, based on 3 recent positive share reviews. The stock is currently selling for $8.15, and its $23.33 average price target implies a 12-month upside potential of 186%. (See Argo’s stock analysis at TipRanks.)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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