Stock Analysis & Ideas

Expert Analyst Darren Aftahi Favors These 2 Blockchain Miners

Story Highlights

Darren Aftahi is a veteran in the technology sector. Let us look at his views on blockchain miners and two top picks for 2022.

In today’s “Expert Spotlight,” we will look at two top picks, Riot Blockchain (NASDAQ:RIOT) and Argo Blockchain (NASDAQ:ARBK) (GB:ARB), that senior Roth Capital analyst Darren Aftahi is optimistic about. Aftahi is the Managing Director of Roth Capital and an expert in the Internet, Media & Enabling Technologies sectors. Aftahi has deep experience covering U.S. and Canadian technology stocks.

According to the expert analyst, the major factors which could impact the performance of these blockchain miners include stiff competition, high power costs, the capital-intensive nature of mining, government regulations, and the price of Bitcoin (BTC-USD).

Aftahi’s Rank Among TipRanks Experts

According to TipRanks’ Star Ranking System, Aftahi ranks #376 among all 7,998 analysts tracked on TipRanks.

Owing to the weak performance of internet and media stocks lately, Aftahi’s overall success rate has dropped to 40%, with an average return of 18.10% over the past year. However, during the same period, his calls generated an alpha of 9.20% and 8.10% over the S&P 500 (SPX) and the sector, respectively.

To date, his best rating has been on Digital Turbine Inc. (NYSE:APPS), which offers solutions for mobile operators, application developers, device original equipment manufacturers (OEM), and other third parties. Aftahi generated a humongous 800% return on his Buy recommendation on APPS stock between the period April 9, 2020, to April 9, 2021.

Riot Blockchain Remains a Top Pick Among BTC Miners

Riot Blockchain is one of the largest U.S.-based publicly traded bitcoin miners in North America. Riot is engaged in building, supporting, and operating blockchain technologies. Amid the chaos in the cryptocurrency markets and a slump in the value of related currencies, RIOT has lost 66.5% so far this year.

In August, Riot produced 374 bitcoins, a decline of 15% compared to August 2021, while at the same time leveraging its proprietary power strategy to reduce overall power costs. As a result, Riot earned $3.0 million in power credits, which equates to approximately 136 bitcoins.

Notably, Riot sold 350 bitcoins in August amounting to $7.7 million. As of August end, Riot produced and held approximately 6,720 bitcoins. The company currently has a deployed fleet of 46,658 miners and a hashrate capacity of 4.8 exahash per second (EH/s).

Aftahi has a Buy rating on RIOT with a price target of $15, which implies a whopping 96.6% upside potential to current levels.

Aftahi is particularly impressed with Riot’s debt-free balance sheet and strong cash position, which enables the company to increase its hashrate consistently. Moreover, the analyst is encouraged by Riot’s efforts to increase BTC holdings over the months and only sell a portion of BTC production.

Notably, Aftahi has consistently given a Buy recommendation on RIOT stock based on his conviction for potential future growth. However, owing to the market turbulence, his success rate on RIOT recommendations is 40%, with a negative average return of 18.55%.

Is RIOT a Buy, Sell, or Hold?

On TipRanks, RIOT stock commands a Strong Buy consensus rating based on six unanimous Buys. The average Riot Blockchain price target of $14.83 implies an impressive 94.4% upside potential to current levels.

Aftahi Remains Optimistic About Argo Blockchain

London-based Argo Blockchain Plc is a global data center business that provides a powerful and efficient platform for cryptocurrency mining operations. Like Riot Blockchain, ARBK stock has lost 51.1% so far this year.

In August, Argo produced 235 bitcoins, jumping 7.3% over July 2022 production. The company achieved a hashrate capacity of 2.5 EH/s in August. Moreover, with the installation of the new Bitmain S19J Pro machines at its Helios facility by October end, Argo expects its total hashrate capacity to increase to 3.2 EH/s. As of August end, Argo held 1,098 bitcoins.

Notably, Argo also announced a new strategic hosting agreement with an undisclosed third party. Per the agreement, Argo will own and operate mining machines owned by the third party at its Helios facility and provide enough electricity to power 10,000 mining machines. Argo will earn 25% of the net profits from the bitcoin mining from the hosted machines.   

Aftahi has a Buy rating on ARBK with a price target of $10, which implies a humongous 119.8% upside potential to current levels.

Our expert analyst is particularly encouraged by Argo’s new hosting agreement and the possibility of having a fixed purchase price agreement (PPA) in place by the year-end. Moreover, the increase in bitcoin mining and hashrate expansion remain favorable factors.

The only concerning factor for Aftahi is Argo’s declining mining margins in August to 20% (July 37%) owing to the increase in spot electricity prices in West Texas to nearly $0.09 per kWh. This represents nearly triple the increase in the average price in August during prior years. However, the fixed PPA should take care of this problem in the future.

Remarkably, Aftahi remains highly optimistic about Argo Blockchain and has given consistent Buy ratings on ARBK stock. However, due to the disruptive factors impacting the cryptocurrency sector, his success rate on ARBK recommendations is a mere 10%, with a negative average return of 37.35%.

Is Argo Blockchain a Buy or Sell?

On TipRanks, ARBK stock has a Strong Buy consensus rating based on five unanimous Buys. The average Argo Blockchain price forecast of $9.40 implies a whopping 106.6% upside potential to current levels.

Ending Thoughts

Aftahi has over 15 years of experience in equity research, risk arbitrage, and investment banking with a focus on the technology, media, and services sectors. Considering his impeccable track record, investors may choose to follow Aftahi’s investment choices to earn reasonable returns. Notably, TipRanks accumulates the recommendations of several Top Experts, which can be considered while making investment choices to maximize returns.


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