On Tuesday, H.C. Wainwright adjusted its outlook on Bitcoin Depot (NASDAQ: BTM), lowering the price target to $4.00 from the previous $5.00, while still maintaining a Buy rating on the stock. This change comes after the company reported weaker than expected fourth-quarter results on Monday, leading to a significant 17% drop in its share price, in contrast to a modest 0.3% decline in the broader Nasdaq.
The revenue for the quarter fell short of both guidance and consensus estimates, and the company provided forecasts for first-quarter 2024 revenue and adjusted EBITDA that were below market expectations. Despite these setbacks, Bitcoin Depot managed to achieve a 7% year-over-year revenue growth in 2023. This was notable considering the company operated approximately 5% fewer kiosks compared to the previous year.
Bitcoin Depot's strategy has involved optimizing its fleet, relocating kiosks to higher performing locations. This process of re-deployment of underperforming kiosks is now largely complete, and the company's focus has shifted to expanding its presence in 2024. Since the end of 2023, the number of deployed kiosks has increased by 16% to 7,375 as of Monday, according to coinatmradar.com. This expansion is part of Bitcoin Depot's aim to surpass 8,000 kiosks by the end of 2024, setting a new record for the company's installed fleet.
Further supporting growth, Bitcoin Depot has recently made a bulk purchase of 900 new kiosks set to be installed by year-end, marking the first large order since 2021. Additionally, the company has secured agreements to deploy around 1,000 kiosks in various U.S. convenience stores starting this quarter and has expanded its sales team by hiring 13 new representatives earlier this year.
"After yesterday's pull-back, shares just got a lot cheaper for the leading cash to BTC ATM operator in the industry, with the stock now trading at just 5.5x our 2024 adjusted EBITDA estimate, presenting an attractive buying opportunity for investors," said the analysts.
InvestingPro Insights
Bitcoin Depot's (NASDAQ: BTM) recent performance reveals a company in a transformative phase. With a market capitalization of $127.32 million, the firm stands out for its potential in the growing cryptocurrency service market. One of the key InvestingPro Tips highlights the company's valuation, which implies a strong free cash flow yield, indicating that Bitcoin Depot's stock could be undervalued relative to its cash-generating ability.
Despite the recent setbacks in revenue and share price, Bitcoin Depot's strategy to optimize and expand its kiosk network is reflected in the 7% revenue growth over the past year, aligning with the company's operational achievements. The InvestingPro Tips also note that analysts predict Bitcoin Depot will be profitable this year, which could signal a turnaround from the losses reported in the last twelve months.
Investors considering Bitcoin Depot should take note of the following InvestingPro Data metrics: a revenue of $688.97 million for the last twelve months as of Q4 2023, a modest revenue growth of 6.51%, and a gross profit margin of 14.56%. These figures suggest that while the company is growing, it is doing so with a watchful eye on profitability.
To gain more comprehensive insights and additional InvestingPro Tips, investors can explore https://www.investing.com/pro/BTM. There are 10 more tips available, which could guide investment decisions. For those interested in a deeper analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.