Marathon Digital (NASDAQ:MARA): Wall Street Sees Even More Upside in This Crypto Stock

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Bitcoin (BTC-USD) has recently been under pressure due to concerns over the debt ceiling impasse and increased regulatory crackdown in the crypto market. Nonetheless, shares of crypto miner Marathon Digital (NASDAQ:MARA) are up 161% year-to-date and top Bitcoin’s 60% rally. Despite the lingering uncertainties, Wall Street sees even more in Marathon.

Recent performances

Marathons revenue fell 1% year-over-year to $51.1 million in the first quarter as a 74% increase in Bitcoin production was more than offset by lower prices of Bitcoin during the quarter. Despite lower revenue, the company was able to narrow its loss per share to $0.05 from $0.12 in the prior year quarter, thanks to a $17.6 million gain on the sale of Bitcoin .

The marathon hash rate increased by 64% to 11.5 Exahashes in the first quarter compared to the end of 2022, which helped boost Bitcoin production. The company produced 2,195 bitcoins during the quarter, up 74% year-over-year.

Marathon also continued to improve its financial position during the quarter and reduced its debt by $50 million. The company ended the first quarter with $124.9 million in unrestricted cash and cash equivalents and 11,466 Bitcoin (market value approximately $326.5 million).

Overall, the company is confident of reaching its target hash rate of 23 Exahash by mid-2023 and aims to be the most energy-efficient Bitcoin mining company.

However, regulatory concerns could be a headwind. In filing 10-Q for the first quarter, Marathon disclosed that in April 2023, it received an additional subpoena from the United States Securities and Exchange Commission regarding the Hardin data center facility, in Montana. The company received the first subpoena in this case in the third quarter of 2021.

Is Marathon Digital a good stock to buy?

Following the first quarter results, HC Wainwright analyst Kevin Dede reiterated a buy rating on Marathon on May 12. East.

Dede also pointed out that Marathon’s 20% stake in the joint venture could generate up to $14 million in other revenue next year.

Wall Street has a strong buy consensus rating on Marathon, with three out of four analysts covering the stock having a bullish assessment. The average price target of $14.75 implies an upside of 65.2%.

Conclusion

Wall Street still sees more in Marathon even after the stellar rally since the start of the year. Nevertheless, investors should exercise caution and be aware of all risks, including high volatility and regulatory concerns, associated with Marathon and the broader crypto market before making any investment decisions.

Disclosure

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