Roth Capital Partners expert Darren Aftahi remained positive on Riot Blockchain (NYSE: RIOT) in a Tuesday investor note, stating that Riot’s robust capital position would aid it to weather the ongoing cryptocurrency winter.
Earlier in December, Riot Blockchain, which includes bitcoin mining facilities in central Texas and electric switchgear engineering and manufacturing operations in Denver, Colorado, released a status report on November output and activities. The company’s closing hash rate was around 7.7 EH/s, an increase of 11.6% month-over-month due to the installation of approximately 6,900 units. RIOT generated around 521 BTC in November, up 2.4% from October. The corporation possessed around 6,897 BTC at the end of November 30 and sold 450 BTC for net revenues of approximately $8.1 million.
In a media release, CEO Jason Les said, “Notwithstanding this unprecedented level of output, predicted production was roughly 660 Bitcoin considering our operational hash rate for the period, considering the normalized operation of the mining pool we partake in.”
“Variability in a mining pool may have an effect on the findings, and although this variation should even out as time passes, it can heavily fluctuate in the near term. This discrepancy resulted in less Bitcoin generation than anticipated in November compared to our hash power,” he explained.
Aftahi commented on the data, stating that although the month-over-month increase did not increase relative to October’s rise, Riot’s installation speed remained high and might enable the company to finish the year around Roth’s objective of about 8.2 EH/s.
Aftahi underscored Riot’s advantages in regard to its financial sheet, which at the conclusion of the third quarter contained $372,3 million in cash and also bitcoin holdings. According to Afahi, this seems robust in contrast to its mining competitors.
“Ongoing financial headwinds from the rest of the miners provide a chance for RIOT to capitalize on sluggish network hash rate expansion (acquiring market share) and foreseeably see better deals on forthcoming machine orders, given that OEMs would require to maintain competitive rates with second-hand devices entering the market. “These characteristics provide an advantageous development environment for a well-capitalized BTC mining company during a BTC bear phase,” Aftahi stated.
Aftahi projects full-year 2022 revenues of $267.8 million and negative EBITDA of $44.1 million, followed by full-year 2023 revenues of $411.3 million and positive EBITDA of $91.7 million.
Following the update, Aftahi reaffirmed a “Buy” rating and an $11.00 price target for RIOT, which at the time of publication indicated a predicted one-year yield of 188%.
