After a tumultuous 2022, affected by many negative developments, culminating in the FTX incident that caused electronic money space into further crisis, 2023 has started with a hit for the industry.
As always, leading the charge, bitcoin has had a stellar rally, up 38% since the start of the year. And as is customary, other tokens have mimicked the behavior of BTC and skyrocketed as well. Of course, the rally has also spilled over into the stock market, with crypto-focused stocks benefiting from the shift in sentiment.
In fact, Josh Siegler, crypto expert at Cantor, expects the stocks of a few BTC miners to offer further upside in the coming months – in the order of 60% or more.
We ran these codes through the TipRanks database to see how the rest of the Street rated Siegler’s picks. As it turns out, Siegler isn’t the only one to be optimistic here; both boast a Strong Buy from Rest of Street consensus rating. Let’s take a closer look.
Riot Platforms, Inc. (THE RURGE OF WOMEN)
Cantor’s first crypto pick is Riot Platforms, one of North America’s largest cryptocurrency miners. The company is focusing on expanding its operations through increasing bitcoin mining hash rate and increasing infrastructure capacity.
The company only had 3.1 EH/s self-mining capacity at the end of 2021 but that has accelerated dramatically over the past months and Riot ended 2022 with 9.7 EH/s, driven by The recent rollout of mining machine purchases has brought total capacity to the company. deploy fleet 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 water-cooled infrastructure. Additionally, the company has around 200 MW of institutional Bitcoin mining clients. Riot recently went through a rebranding process, changing its name from Riot Blockchain to Riot Platforms.
In addition to quarterly results, the company provides monthly updates on its performance. The latest, in December, shows that Riot has mined 659 BTC, an increase of 55% compared to December 2021. The company sold 600 BTC, raising about 10.2 million USD.
Riot shares fell completely last year, but are up 88% since their December low. That said, Cantor’s Josh Siegler thinks they have more room to run.
Making RIOT his “Top Crypto Pick,” Siegler makes a bullish case. “With scale being paramount in this industry, we appreciate RIOT’s ability to mine more Bitcoins than other companies and reinvest the proceeds to scale further,” he wrote. again. Gross margin remains the best in its class at ~65%, largely due to the unique energy deals it has signed… Unlike other miners, RIOT doesn’t need to increase. add debt or equity to achieve its guidance.”
Siegler doesn’t just write down an optimistic outlook; he backs it up with an Overweight (i.e. Buy) rating on RIOT stock and a $12 price target that implies a one-year upside potential of 61% from current levels. (To see Siegler’s achievements, click here)
Overall, it’s clear that Wall Street agrees with Siegler on RIOT’s forward outlook. The 8 recent analyst reviews of this stock include 7 Buy and 1 Hold, for a strong Buy consensus indicating a bullish outlook. The stocks are priced at $6.20 and their average $10.06 price target implies a 62% gain in 12 months. (See RIOT stock forecast)
CleanSpark, Inc. (CLSK)
The next Cantor-endorsed crypto stock is CleanSpark, another bitcoin miner. However, that is not always the case with this company. CleanSpark was once just a provider of microgrid solutions and only started mining operations at the end of 2020. However, since then, mining operations have become a major concern, with technology company is now the official bitcoin mining company.
The company operates its own bitcoin mining facilities in Atlanta, Georgia, and co-mining facilities in Massena, NY. While bitcoin mining is known to be extremely energy intensive, CleanSpark advertises itself as a sustainable mining company and mines primarily with renewable or low-carbon energy sources. The company’s capital management policy involves the sale of a large amount of mined BTC, the proceeds of which will be used to fund further development. 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 as the industry struggles.
According to the company’s recent update, the latest generation of 63,700 bitcoin miners mined 464 bitcoins in December, resulting in an annual output of 4,621 – a growth of more than 200%. The company sold 517 bitcoins in December at an average price of ~$17,000/BTC, with sales of ~$8.7 million.
At the same time, the company said it is reducing 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 signed agreement to deploy some of its mining equipment.
While the result is a lower hash rate at the end of the year, Siegler sees the development as a “clearing event” for the stock.
“The 16.0 EH/s target will still solidify CLSK as one of the largest, vertically integrated self-mining companies in the industry,” the analyst said. “However, we believe the company has greater foresight and control over the development of self-mining sites than co-location infrastructure. Furthermore, the company revealed that their new hash rate guide only requires ~95,000 rigs and ~$70 million in CapEx spending. Assuming rigs can be purchased for ~$15/TH, this means the new cost to achieve its target hash rate is ~$212.5 million. This compares favorably with our current conservative assumption of ~$350 million and will likely result in less equity dilution.”
Shares of CleanSpark may be up 48% since the December low, but Siegler thinks they have plenty of room to operate. The analyst rates the stock as Overweight (i.e. Buy) with a $5 price target. This number gives the chance for a one-year return of 89%.
Two other analysts have recently joined in with reviews of CLSK and both are positive, making the consensus here to be Strong Buy. At $7.33, the median target implies that the stock will appreciate 178% over the next year. (See CleanSpark stock forecast)
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Disclaimer: The opinions expressed in this article are those of the featured analyst only. Content is used for informational purposes only. It is very important that you do your own analysis before making any investment.
