Bitcoin miner Riot Platforms’ stock is considered a buy due to its significant organic growth opportunities, according to H.C. Wainwright analyst Mike Colonnese.

The Riot Platforms stock has experienced a 34% decline year-to-date amid a broader correction for Bitcoin and altcoins, which has also affected crypto stocks. However, Colonnese argues that the bitcoin mining stock is poised for further growth as it plans for expansion. He maintains a buy rating for RIOT with a $17 price target.

Riot’s Financial Results

Riot released its second-quarter results on July 31, revealing substantial operational growth. Jason Les, CEO of Riot, highlighted that the company made progress on its long-term growth strategy. According to Colonnese, Riot “officially raised its 2024 and 2025 outlook and reported 2Q24 top line results.”

Despite the mixed financial results, the company exceeded estimates on several metrics, including stronger engineering revenues. Riot also surpassed its hash rate guidance for the quarter, reaching 21.4 exahashes per second. The 77% quarter-on-quarter growth in the three months ending June 30 meant Riot reached 22 EH/s, the fastest growth rate in hashrate for public miners tracked by H.C. Wainwright, Colonnese added.

Expansion Efforts

Bullish projections for RIOT also come as the miner looks to expand its capacity further. Recently, Riot acquired Kentucky-based BTC miner, Block Mining. This acquisition puts Riot on track toward achieving its 2024 and 2025 growth objectives.

Despite challenges with plans to acquire another Bitcoin miner, Riot remains on course for success. According to the H.C. Wainwright note, the company is well-positioned for the next 18 months, primarily due to its balance sheet, which boasts over $1 billion of liquidity compared to about $694 million of estimated capex requirements to the end of 2025.

“With low power costs, good scale, and a strong balance sheet, we believe Riot is competitively positioned to benefit from the next leg of the bull market cycle for BTC,” the analyst concluded.

Riot’s guidance for the end of 2024 is growth to a hashrate of 36.3 EH/s and 56.6 EH/s by the end of 2025. Meanwhile, the RIOT stock traded around $9.97, down 2.2% at 10:27 am ET on Aug. 1, 2024.

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