Investors gave Riot Blockchain’s (RIOT) quarterly results a thumbs down as the stock slid 23.9% in the past five days following its Q3 results, and a fall in Bitcoin prices. The Bitcoin mining company’s loss widened from $0.04 per share to $0.16 per share in Q3. Analysts were expecting a profit of $0.35 per share.
However, RIOT’s Q3 total revenues soared by 2,532 percentage points to a record $64.8 million. Bitcoin production jumped 482% year-over-year to 1,292 bitcoins versus 222 BTC in the same period a year back.
While investors seem to be unimpressed with the rise in BTC production and revenues, BTIG analyst Gregory Lewis had a different take. The analyst pointed out that RIOT’s completion of its $600 million at-the-market (ATM) offering would provide the company “ample capital [including cash-on-hand of $58 million] for RIOT to continue to execute on its Whinstone infrastructure expansion and pay for its mining rigs on order while still holding all of its mined BTC.”
Last month, Riot Blockchain had announced the development of its first industrial-scale Bitcoin mining facility that would use 200 megawatts (MW) of immersion-cooling technology at Whinstone.
Lewis noted that the company’s management stated that it had made “substantial progress” on the 400 MW expansion at Whinstone, out of which 200 MW will use immersion-cooling technology. (See Top Smart Score stocks on TipRanks)
The analyst expects that this expansion should increase Whinstone’s capacity to 750 MW and more than 1 gigawatt (GW) over the medium term. Lewis added, “With RIOT’s ~90k miners on order taking up roughly ~285MW, we continue to see upside in RIOT’s hosting capacity in coming quarters.”
When it comes to growth in hash rate, by the fourth quarter of next year, RIOT expects a total self-mining hash rate capacity of 8.6 exahash per second (EH/s). Hash rate measures the processing power of the Bitcoin mining network.
Considering the ramp-up of its infrastructure and mining capacity coupled with a strong operating performance, Lewis remains upbeat about the stock. The analyst reiterated a Buy rating and raised its price target from $45 to $50 (42.9% upside) on the stock.
The rest of the analysts on Wall Street are also bullish, with a Strong Buy consensus rating based on five unanimous Buys. The average Riot Blockchain price target of $47.60 implies 35.8% upside potential to current levels.
Disclosure: At the time of publication, Shrilekha Pethe did not have a position in any of the securities mentioned in this article.Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.