On Tuesday, Roth/MKM raised its price target for Bitdeer Technologies Group (NASDAQ: BTDR) to $15 from the previous $14, while maintaining a Buy rating on the stock. The firm cited the company's progress in its vertical integration strategy and the promising demand for its second-generation SEALMINER machines as key factors. Bitdeer is also planning to triple its self-mining hash rate by the end of 2025.
The company is benefiting from the recent rise in Bitcoin prices, which has improved margins for its Bitcoin mining operations. However, the firm believes the long-term opportunities for Bitdeer lie in building out its Ohio sites for high-performance computing (HPC) use cases, which would offer more stable economics. The Ohio sites, with a combined capacity of approximately 800 megawatts, are central to Bitdeer's strategy to transition towards HPC.
Bitdeer has started early discussions with potential partners and end-users for its HPC initiative. A clear strategy or contract announcement in this area could significantly boost the company's share value. The firm's current price target reflects the higher potential for a successful HPC transition.
Currently, Bitdeer is primarily focused on Bitcoin mining and is set to increase its self-mining hash rate threefold from the third quarter of 2024 to the end of 2025. While the recent increase in Bitcoin prices has been beneficial, the volatility associated with Bitcoin mining profitability contrasts with the long-term and more predictable contracts that could arise from HPC diversification.
The firm's new price target of $15 implies approximately 28 times the fiscal year 2025 AEBITDA of about $67 million. This valuation is attributed to the higher likelihood of Bitdeer transitioning to high-performance computing. Additionally, the potential expansion of Bitdeer into selling its mining hardware to third parties could provide further upside to the company's profit and loss statement and potentially to the price target.
In other recent news, Bitdeer Technologies Group has encountered a series of significant developments. The company's recent earnings report showed revenues of $99.2 million, falling short of analyst expectations. Despite this, Rosenblatt Securities and H.C. Wainwright raised their target price for Bitdeer, with Rosenblatt increasing it to $17 and H.C. Wainwright to $18, both maintaining a Buy rating. B.Riley, however, revised its price target for Bitdeer, reducing it to $12, while Northland initiated coverage of Bitdeer with an Outperform rating.
Bitdeer has begun mass production of its SEALMINER A1 and A2 mining machines, contributing to the company's self-mining expansion plans for 2025. The company expects to triple its self-mining capacity to about 23 EH/s by 2025. Bitdeer has also received deposits for 30,000 units of the air-cooled SEALMINER A2 rigs, which are anticipated to generate approximately $102 million in revenue from ASIC sales in 2025.
Roth/MKM maintained a positive stance on Bitdeer, highlighting the potential of the company's high-performance computing capabilities, which could generate $850 million in annual recurring revenue. Bitdeer also completed an offering of $172.5 million in convertible senior notes due 2029.
InvestingPro Insights
Bitdeer Technologies Group's recent performance and future prospects align with several key metrics and insights from InvestingPro. The company's market capitalization stands at $1.75 billion, reflecting investor confidence in its growth strategy.
InvestingPro data shows that Bitdeer has experienced remarkable price performance, with a 196.25% total return over the past year and a 71.99% return in the last three months. This aligns with the positive outlook presented in the article, particularly regarding the company's vertical integration strategy and the potential of its SEALMINER machines.
Two relevant InvestingPro Tips highlight both opportunities and challenges for Bitdeer. First, the company "holds more cash than debt on its balance sheet," which provides financial flexibility to pursue its ambitious expansion plans, including tripling its self-mining hash rate by the end of 2025. However, Bitdeer is also "quickly burning through cash," which investors should monitor given the capital-intensive nature of Bitcoin mining and the planned transition to high-performance computing.
These insights complement the article's discussion of Bitdeer's strategic direction and potential for growth. For readers interested in a deeper analysis, InvestingPro offers 13 additional tips that could provide further context to Bitdeer's financial health and market position.
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