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H.C. Wainwright has adjusted its outlook on Bitdeer Technologies Group (NASDAQ: BTDR), lowering the price target to $17 from $20, yet maintaining a Buy rating on the stock. The revision follows Bitdeer's second-quarter earnings report released on Monday, which did not meet the firm's expectations.
The shortfall in revenue was attributed to a quicker-than-anticipated conclusion of contracts in the company's general hosting and cloud hash rate segments, as well as the impact of post-halving mining economics, prompting some hosting customers to shut down operations.
Bitdeer disclosed its quarterly performance, revealing a period marked by challenges. Despite these setbacks, the company is recognized for having a substantial portfolio of power assets and a robust pipeline of development opportunities, which are projected to be operational by the end of next year. Bitdeer's current power capacity stands at 895 megawatts, with plans for an additional 1.6 gigawatts of expansion.
The company is also scaling up its self-mining activities with the launch of its proprietary mining rig, the SEALMINER. The initial batch of these miners has been activated, and Bitdeer anticipates adding 3.4 exahashes per second (EH/s) to its existing proprietary hash rate of 8.6 EH/s by the end of the year. The internally developed ASIC grants Bitdeer a cost advantage over competitors and is anticipated to become a significant revenue stream following the commercial release of its first mining rig in the fourth quarter of 2024.
The second generation of the SEALMINER is expected to deliver competitive performance with efficiency levels ranging between 15.0 and 16.5 joules per terahash (J/TH). The analyst emphasized the presence of multiple factors within Bitdeer's business model that offer potential for growth, which are currently undervalued by the market.
Bitdeer Technologies Group has seen a flurry of activity. Analyst firms have revised their price targets for Bitdeer, with Benchmark raising its target to $16.00, B.Riley to $14.00, and Cantor Fitzgerald to $15.00, all maintaining positive ratings. These adjustments follow Bitdeer's recent announcements of growth and expansion.
The company has reported a slight decrease in Bitcoin production, attributed to ongoing optimization at its mining facilities. However, Bitdeer has also announced substantial increases in its global contracted power capacity, now reaching 2.5 gigawatts (GW), following a new 570-megawatt (MW), 30-year lease agreement with the Monroe County Port Authority in Ohio. This capacity increase is expected to facilitate not only Bitcoin mining but also high-performance computing (HPC).
Bitdeer has also made significant advancements in the development of its proprietary SEAL bitcoin mining chips and SEALMINER mining rigs. These innovations are part of Bitdeer's strategy to reduce costs through vertical integration. The company plans to deploy these technologies for self-mining operations and also aims to supply them to the broader market.
In line with its expansion strategy, Bitdeer has commenced the conversion of a 100 MW site in Texas to hydro-cooling technology. The company is on track to deploy 3.4 EH/s of its proprietary ASIC technology in its data centers by the end of 2024. Bitdeer has a near-term pipeline of 175 MW driven by the Tydal phase 1 & 2 development, with expectations to add 1.65 GW of power capacity by the end of 2026.
InvestingPro Insights
Following the recent earnings report from Bitdeer Technologies Group (NASDAQ:BTDR), investors are closely monitoring the company's financial health and stock performance. According to InvestingPro, Bitdeer holds more cash than debt on its balance sheet, which could provide the company with a buffer against financial stress and support its expansion plans. Additionally, the stock has experienced a strong return over the last three months, indicating a potential rebound after previous declines.
InvestingPro Data highlights a significant revenue growth of 31.48% over the last twelve months as of Q2 2024, suggesting that despite recent challenges, Bitdeer is managing to expand its revenue base. However, the company has not been profitable over the same period, which is a critical aspect for investors to consider. The stock's price has also been trading at 51.95% of its 52-week high, reflecting the recent volatility and downward pressure on the stock price.
For investors seeking a deeper dive into Bitdeer's performance and future prospects, InvestingPro offers additional tips, including insights into the company's cash burn rate and valuation implications. There are 10 more InvestingPro Tips available that can provide a more comprehensive analysis of Bitdeer's financial health and stock potential.
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