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Friday - Cantor Fitzgerald analysts reiterated their Overweight rating on Hut 8 Mining Corp. (NASDAQ:HUT) with a steady price target of $30.00, well above the current stock price of $13.41. The firm’s analysts noted a decrease in Bitcoin mining production for Hut 8 during February, with the company mining 46 Bitcoin, averaging 1.6 Bitcoin per day, down from 65 Bitcoin or 2.1 per day in January. According to InvestingPro data, the stock appears undervalued despite a significant 74% return over the past year.
The reduction in mining output was attributed to a decline in Hut 8’s deployed hash rate, which fell to 4.6 EH/s from 5.0 EH/s. This was combined with an approximate 3.7% increase in the average network hash rate for the month. The decrease in Hut 8’s hash rate has been linked to the company’s ongoing fleet upgrade, following its recent acquisition of 31,145 S21+ Bitmain mining rigs. Despite recent operational challenges, InvestingPro analysis shows the company maintains a healthy financial position with a current ratio of 1.67 and an Altman Z-Score of 3.04, indicating low financial distress risk.
The new mining equipment began arriving in tranches at Hut 8’s Salt Creek and Medicine Hat facilities within the month. The deployment of these rigs is currently underway, which has resulted in some operational downtime. Once the fleet upgrade is complete, Hut 8’s hash rate is expected to roughly double, reaching approximately 10.3 EH/s and enhancing fleet efficiency to around 20.5 J/TH.
Due to the lower mining output and the operational transition, Hut 8’s self-mining revenue for February was estimated at $2.0 million, a drop from the $3.6 million generated in January. This estimation was based on an average Bitcoin price of $95,851 during the month of February. Despite the temporary decrease in mining production, Cantor Fitzgerald’s position reflects confidence in Hut 8’s strategic upgrades and long-term performance. InvestingPro reveals the company’s strong revenue growth of 69% in the last twelve months, with 13 additional exclusive ProTips available for subscribers seeking deeper insights into HUT’s investment potential.
In other recent news, Hut 8 Mining Corp. reported strong financial results for Q4 2023, with revenue increasing by 69% year-over-year to $162.4 million and net income rising to $331.4 million from $21.9 million in the previous year. The company has been focusing on developing AI data centers and expanding its Bitcoin mining operations, which was highlighted during their recent earnings call. Analysts at Rosenblatt Securities initiated coverage on Hut 8 Mining with a Buy rating and a price target of $23.00, citing the merger with US Bitcoin as a key driver for shareholder value. Meanwhile, Benchmark analysts maintained their Buy rating with a $41.00 price target, reflecting confidence in the company’s strategic direction and expansion plans.
H.C. Wainwright also maintained a Buy rating and a $30.00 price target, emphasizing Hut 8’s potential high-performance computing/artificial intelligence deal. The firm highlighted Hut 8’s Riverbend project, which could yield significant revenue if fully realized. Hut 8’s management has been actively advancing three large-scale AI data center projects, which were discussed during the earnings call. Institutional ownership in the company rose from 12% to 55%, indicating increased investor confidence. These developments come as Hut 8 Mining continues to focus on strategic partnerships and financing mechanisms to support its growth initiatives in the evolving cryptocurrency and AI data center markets.
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