The transformation of Bitcoin miners into industrial-scale entities is a noteworthy trend, with North America now surpassing China's market share. Bernstein analysts have highlighted this shift in a recent report. They endorsed Riot Platforms (NASDAQ:RIOT) and CleanSpark (NASDAQ:CLSK) as potential market share consolidators due to their operational prowess, low production costs, high liquidity, and unlevered balance sheets.
The analysts gave Riot Platforms and CleanSpark outperform ratings and set price targets at $15.60 and $5.30 respectively. These companies' counter-cyclical investments in Bitcoin self-mining capacity are expected to provide significant advantages after the next Bitcoin halving event in April 2024.
Contrastingly, Marathon Digital (NASDAQ:MARA), currently the largest miner, was assigned a 'market-perform' rating due to its sub-par costs and reliance on hosting partners. Bernstein set Marathon Digital's price target at $8.30.
Bernstein's analysis aligns Bitcoin price cycles with its halving events. The analysts predict a surge in Bitcoin's price to $150,000 by mid-2025, following the pattern established over the past four years. They emphasized that investing successfully in Bitcoin mining can serve as a high-beta strategy for gaining exposure to the market.
InvestingPro Insights
InvestingPro data indicates some noteworthy trends for Riot Platforms and CleanSpark. As of Q2 2023, Riot Platforms holds a market cap of $1910M USD with a P/E ratio of -5.51. The company has seen a decline in revenue growth of -16.87% in the last twelve months. Additionally, the price has experienced a notable drop of -48.11% over the last three months.
CleanSpark, on the other hand, reports a market cap of $624.31M USD with a P/E ratio of -3.00 as of Q3 2023. The company's revenue growth has been somewhat more positive, at 11.57% over the last twelve months. However, the price has also fallen significantly over the last three months, down by -31.95%.
InvestingPro Tips highlight that Riot Platforms holds more cash than debt on its balance sheet and its liquid assets exceed short term obligations. However, the company has not been profitable over the last twelve months. For CleanSpark, strong earnings are expected to allow continued dividend payments, despite analysts predicting the company will not be profitable this year.
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