After a tumultuous 2022, impacted by multiple negative developments culminating in the FTX debacle that sent the crypto space in a major merger, 2023 has started with a bang for the industry.
As always, leading the charge, bitcoins It has made an excellent recovery, up 38% since the turn of the year. And as usual, other tokens have mimicked BTC’s behavior and got ahead of it as well. Of course, the rally has also faded in the stock market, with crypto-focused stocks benefiting from the change in sentiment.
In fact, Josh Siegler, the crypto specialist at Cantor, expects shares of a couple of BTC miners to deliver more gains in the coming months, on the order of 60% or more.
We ran these tickers through the TipRanks database to see what the rest of the Street makes of Siegler’s picks. As it turns out, Siegler isn’t the only one taking a bullish view here; both have Strong Buy consensus ratings from the rest of the street. Let’s take a closer look.
Riot Platforms, Inc. (RIOT)
Cantor’s first cryptocurrency pick is Riot Platform, one of the largest cryptocurrency mining firms in North America. The company is focused on expanding its operations by increasing its bitcoin mining hash rate and increasing its infrastructure capacity.
The company had just 3.1 EH/s of automatic withdrawal capacity at the end of 2021, but that has accelerated considerably in recent months, with Riot ending 2022 with 9.7 EH/s, buoyed by the rollout of recent purchases of miners who raised their total capacity. fleet deployed to 88,556 miners. With further expansion, the company is targeting a hash rate of 12.5 EH/s by the end of Q1 as the Rockdale, Texas facility adds a new building and the company installs more miners. Riot is also in the process of putting together 200 MW of immersion cooling infrastructure. Additionally, the company hosts approximately 200 MW of institutional Bitcoin mining clients. Riot recently went through a rebrand, changing its name from Riot Blockchain to Riot Platforms.
In addition to quarterly results, the company provides monthly updates on its operations. The last one, from December, showed that Riot mined 659 BTC, which is a 55% increase compared to December 2021. The company sold 600 BTC, generating a net profit of approximately $10.2 million.
Riot shares were absolutely decimated last year, but are up 88% from December lows. That being said, Cantor’s Josh Siegler thinks they have more room to run.
Making RIOT his “Crypto Top Pick,” Siegler makes the bullish case. He writes: “Since scale is paramount in this industry, we are confident in RIOT’s ability to mine more Bitcoin than others and reinvest those profits to further scale. Gross margin remains best in class at ~65%, largely due to the unique power deals it has entered into…Unlike other miners, RIOT does not need to raise additional debt or equity to achieve its guidance” .
Siegler doesn’t just write an optimistic outlook; he backs it with an Overweight (ie Buy) rating on RIOT stock and a $12 price target that implies a 61% one-year upside potential from current levels. (Watch Siegler’s trajectory, Click here)
Overall, it’s clear that Wall Street agrees with Siegler on RIOT’s future prospects. The stock’s 8 recent analyst reviews include 7 Buys and 1 Hold, for a strong Buy consensus indicating a bullish outlook. The shares are priced at $6.20 and their $10.06 average price target implies a 62% 12-month upside. (Watch RIOT Stock Forecast)
CleanSpark, Inc. (CLSK)
The next Cantor-backed crypto stock is CleanSpark, another bitcoin miner. However, that was not always the case with this company. CleanSpark was once just a microgrid solution provider and only started mining operations in late 2020. However, since then, mining activities have become the main concern, and the company is now a full-fledged bitcoin miner. right.
The company operates its own bitcoin mining facility in Atlanta, Georgia and co-locates the miners in Massena, New York. Although bitcoin mining is known to be energy intensive, CleanSpark markets itself as a sustainable mining company and mines primarily with low-carbon or renewable energy sources. The company’s capital management policy is to sell a large portion of the mined BTC, the proceeds of which go to fund further growth. This has allowed CleanSpark to increase its hash rate from 2.1 EH/s in January 2022 to 6.2 EH/s in December, even in the face of industry difficulties.
According to the company’s recent update, its fleet of 63,700 state-of-the-art bitcoin miners mined 464 bitcoins in December, resulting in an annual output of 4,621, representing growth of more than 200%. The company sold 517 bitcoins in December at an average of ~$17,000/BTC, with the sales generating a profit of ~$8.7 million.
At the same time, the company said it is lowering its CY23E hash rate outlook from 22.4 EH/s to 16.0 EH/s, due to delays in infrastructure expansion at Lancium, where CleanSpark has signed an agreement to deploy some of your mining equipment. .
While the result will be a lower hash rate by the end of the year, Siegler sees the development as a “netting event” for the stock.
“A target of 16.0 EH/s would still cement CLSK as one of the largest vertically integrated autominers in the industry,” the analyst said. “However, we believe that the company has better foresight and control over the development of its own mining sites than the co-location infrastructure. Additionally, the company revealed that its new hash rate guidance requires only ~95,000 rigs and ~$70MM of CapEx spending. Assuming the rigs can be acquired at ~$15/TH, this would imply that the new cost to reach your target hash rate is ~$212.5 million. This compares favorably with our current conservative assumption of ~$350MM and will likely result in lower capital dilution.”
Shares of CleanSpark might have rallied 48% from the December trough, but Siegler believes they have much more room to run. The analyst rates the stock an Overweight (ie Buy) along with a $5 price target. The figure leaves room for one-year returns of 89%.
Two other analysts have recently dabbled in CLSK reviews, and both are also positive, making the consensus view here a Strong Buy. At $7.33, the median target implies the stock will appreciate by a hefty 178% in the next year. (Watch CleanSpark Stock Forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.