Analyst: Bitfarm’s stock is unjustifiably discounted, sees 75% upside

Analysts from H.C. Wainright believe Bitfarm’s growth strategy is promising, and the stock could have a 75% upside.

In a recent market report, the analysts expressed optimism about Bitfarms‘ potential to expand its market share and lower production costs in 2024. They cited Bitfarm’s actions to embark on a fleet upgrade and growth strategy and anticipate a reduction in electricity costs. 

Bitfarms is a worldwide, fully integrated Bitcoin mining company with 12 mining facilities worldwide.

Despite potential short-term volatility due to macro and geopolitical concerns, the H.C. Wainright analysts are bullish on Bitcoin’s price in the medium and long term. They view the shares as an attractive investment with a Buy rating and a $4 price target, implying 75% potential upside from current levels due to its growth plans and operational performance.

At the time of writing, Bitfarm shares are trading at $2.40 a share.

Energy efficiency

Bitfarms aims to significantly reduce its direct production costs through an upgraded and more energy-efficient mining fleet, per the report. They estimate a 30% decrease in direct production costs per Bitcoin (BTC) mined, resulting in improved gross margins.

According to the report, Bitfarms will increase its hash rate by 223% year over year in 2024 to become one of the largest public miners by scale.

Faster operations and a new CEO 

Bitfarms owns and operates its mining facilities with over 75% renewable hydropower, resulting in nearly 100% uptime. In 2023, the company achieved the highest utilization rate among miners with over 4 EH/s and earned an estimated 11% more BTC per EH/s compared to its peers.

Bitfarms has also initiated the search for a new CEO following Geoff Morphy’s termination on May 13. In the meantime, Co-Founder and Chairman Nico Bonta will serve as the interim CEO until a successor is identified, which is expected to happen in the next few weeks. Despite the change in CEO, Bitfarms’ management team’s expertise and capability should help maintain the company’s growth initiatives in the near term, although this transition may raise concerns for potential new investors.