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On Tuesday, H.C. Wainwright reiterated a Neutral rating on Gryphon Digital Mining (NASDAQ:GRYP), following the company’s announcement of its full-year 2024 sales results and a strategic shift towards the high-performance compute (HPC) market. Gryphon Digital Mining reported a slight decrease in sales to $20.5 million for the year 2024, down from $21.1 million in 2023, which aligns with the downward trend in bitcoin mining economics that the industry is currently experiencing. According to InvestingPro data, the company’s financial health score is rated as WEAK, with a concerning current ratio of 0.06 and significant debt burden of $19.27 million.
The company’s recent earnings call, which covered the fourth quarter of 2024, highlighted a significant pivot in Gryphon’s business model. The new management is now focusing on addressing the HPC market, which is described as burgeoning. Gryphon is reducing its bitcoin mining activities, which are now seen as a means to finance the development of HPC initiatives. The goal is to have HPC facilities operational at the Captus site in Alberta by the end of 2026, with the first 6MW tranche possibly ready before the end of 2025. With the stock down 88% over the past year and trading below InvestingPro’s Fair Value estimate, investors seeking deeper insights can access comprehensive analysis and 11 additional ProTips through the Pro Research Report.
The Captus project boasts several attractive features for HPC development, such as access to abundant natural gas in Alberta and proximity to Calgary, which reduces latency, crucial for inference AI. Additionally, the site has the unique potential for carbon sequestration due to specific geological conditions, which could lead to a greener power generation solution. The project aims to deliver up to 4GW of electrical energy.
Despite these positive developments, H.C. Wainwright expresses caution regarding Gryphon’s prospects. The firm notes that Gryphon is still facing significant challenges, including the absence of a finalized power deal, lack of financing, and no confirmed customers. The analyst also mentioned that Gryphon’s option in Louisiana is no longer being considered, and the Erikson deal in British Columbia is on hold pending further review. The analyst’s commentary underscores the precarious position of Gryphon as it navigates its strategic transition. InvestingPro data reveals the company’s negative EBITDA of -$2.74 million and concerning return on assets of -216.66%, with analysts not anticipating profitability this year.
In other recent news, Gryphon Digital Mining Inc. announced its financial results for the fourth quarter of 2024, marking a strategic shift from Bitcoin mining to high-performance computing (HPC) and AI infrastructure. The company reported a net loss of $21.3 million, an improvement from the $28.6 million loss in 2023, while generating $20.5 million in revenue from mining 3.34 Bitcoin. Gryphon is transitioning its focus to HPC and AI, supported by a strategic acquisition of Captus to expand computing infrastructure. This acquisition aims to position Gryphon as a significant player in the HPC and AI sectors, with plans to develop 130 megawatts of computing infrastructure by 2026. The company’s debt restructuring reduced liabilities by approximately $13 million, converting debt to equity, and Anchorage Digital has become a key advisor. Gryphon’s CEO, Steve Guterman, emphasized the company’s commitment to maximizing shareholder value and highlighted the importance of power in the future economy. Analysts from H.C. Wainwright and Ladenburg Thalmann have shown interest in Gryphon’s strategic shift and its implications for future growth.
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