The global blockchain market is expected to grow at a compounded annual growth rate of 56.3% over the next seven years to reach $163.83 billion by 2029 from $7.18 billion in 2022, according to a report by Fortune Business Insights. The market was valued at $4.67 billion last year. Riot Blockchain Inc. (NASDAQ:RIOT), which has lost 81.5% over the past year, is one stock that stands to benefit from this opportunity, which will primarily be driven by blockchain technology’s ability to provide open access to data.
What Does Riot Blockchain Do?
Headquartered in Colorado, Riot Blockchain offers industrial-scale digital infrastructure. The company is also engaged in Bitcoin mining, with operations and a mining data center in central Texas. Additionally, it has electrical switchgear engineering and fabrication operations in Denver, Colorado.
Recently, RIOT reported financial results for the second quarter of 2022. Let’s find out how did the company perform during the quarter.
A Snapshot of Riot Blockchain’s Q2 Results
Revenues increased 112% year-over-year to $72.9 million, driven by a 47% rise in mining revenue to $46.2 million. Data center hosting revenue totaled $9.8 million and the Engineering segment’s revenue stood at $16.9 million.
The amount of Bitcoin produced more than doubled to 1,395, and adjusted EBITDA came in at a negative $65.2 million, compared to $2.4 million reported in the year-ago quarter.
Riot Blockchain posted a loss of $2.81 per share during the quarter versus a profit of 22 cents per share in the second quarter of last year. A goodwill impairment charge of $349.1 million and a $99.8 million accounting impairment charge on Bitcoin pushed the company into the red.
Is Riot Blockchain a Buy?
Analysts seem to be very bullish on Riot Blockchain. On TipRanks, RIOT stock has a Strong Buy consensus rating based on six unanimous Buys. RIOT’s average price forecast of $14.83 implies 115.2% upside potential to current price levels.
Following the release of RIOT’s quarterly results, Cantor Fitzgerald analyst Josh Siegler said, “Riot is a best-in-class pick in the cryptocurrency mining industry due to its strong balance sheet and vertically-integrated positioning.” The analyst has maintained a Buy rating on RIOT stock but lowered his price target to $12 from $42 (74.2% upside potential).
Last month, Lucas Pipes of B.Riley Financial (NASDAQ:RILY) added Riot Blockchain to the financial services provider’s “25 for 2022” pick list. The analyst is of the view that the company “represents the best combination of growth and value.”
Contrary to analysts, hedge funds and retail investors have a Neutral view on RIOT stock. The view seems to be in line with a score of four out of 10 on TipRanks’ Smart Score Rating system.
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