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On Thursday, H.C. Wainwright analyst Mike Colonnese reaffirmed a Buy rating on Bitfarms Ltd. (NASDAQ:BITF) but reduced the price target to $3.50 from the previous $4.00. The adjustment follows Bitfarms’ fourth quarter and full-year 2024 earnings call, which provided significant updates on its Bitcoin mining operations and high-performance computing/artificial intelligence (HPC/AI) initiatives. According to InvestingPro data, the stock currently trades at $0.95, showing significant volatility with a beta of 3.27.
Colonnese highlighted Bitfarms as one of the most attractively valued miners in the sector and added the company to H.C. Wainwright’s top picks list for Bitcoin mining in 2025. The company has reportedly scaled its total operating capacity to 18.6 exahashes per second (EH/s), nearly tripling from 6.5 EH/s at the end of 2023. This growth is attributed to transformative upgrades in the company’s mining fleet, which have also improved overall fleet efficiency by approximately 45% to 19 joules per terahash (J/TH). InvestingPro data reveals impressive revenue growth of 43.88% in the last twelve months, though the company faces challenges with negative gross profit margins.
These advancements, combined with competitive power costs in the range of 4.3 cents per kilowatt-hour, have enabled Bitfarms to significantly reduce its hash costs to approximately $20-$22 per petahash, compared to the current hash price of around $50 per petahash. This represents a reduction of about 45% from $36 per petahash at the start of 2024.
Despite these improvements, Bitfarms’ stock has seen a 57% correction since the third quarter earnings call in November, a period during which the Nasdaq declined by 7%. During the November call, Bitfarms had adjusted its 21 EH/s outlook to the first half of 2025 from the end of 2024. With a market capitalization of $448.45 million and trading at just 0.88 times book value, the market is currently valuing Bitfarms’ mining operations at approximately $25 million per deployed EH, which Colonnese considers a significant and unwarranted discount compared to larger peers who trade closer to $85 million per EH. For deeper insights into Bitfarms’ valuation metrics and financial health, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with detailed analysis and actionable intelligence.
The analyst anticipates that this valuation gap will narrow as Bitfarms continues to capitalize on its upgraded mining fleet. Additionally, the potential of the HPC/AI opportunity is expected to contribute to the company’s growth, driving meaningful upside. Colonnese’s reiterated Buy rating reflects an optimistic outlook on Bitfarms’ ability to extract full value from its operations and leverage emerging opportunities.
In other recent news, Bitfarms Ltd. reported a notable 21% increase in revenue for the fourth quarter of 2024, reaching $56 million. The company’s net income was reported at $15 million, translating to $0.03 per share, surpassing analysts’ expectations of a negative earnings per share forecast. The company’s strategic moves included the acquisition of Stronghold Digital Mining and the sale of its EcoXi data center in Paraguay, reflecting a shift towards enhancing its North American presence. Bitfarms has also improved its mining fleet efficiency by 45% and increased its energy capacity by 90%, supporting its operational growth. Furthermore, the company is targeting less than $100 million in capital expenditures for 2025, with plans to significantly expand its energy capacity in the coming years. Analyst firms like Cantor Fitzgerald and H.C. Wainwright have shown interest in Bitfarms’ potential for expanding its HPC and AI infrastructure. These developments highlight Bitfarms’ strategic focus on energy and compute infrastructure in the U.S., positioning it for future growth.
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