• Cantor Fitzgerald’s crypto specialist rated Overweight for two mining companies
• Analyst Considers Riot Platforms “Crypto Top Pick”
• High price target also for Bitcoin miner Cleanspark
After the downturn in the crypto market in 2022, the mood has improved somewhat in the new year. Since the beginning of the year, not only Bitcoin and Co. have been on the up again, crypto stocks are also benefiting from the returning confidence of investors. According to TipRanks, analyst Josh Siegler believes that two mining stocks are currently of particular interest to investors. He is the head of FinTech, crypto and blockchain research at the US financial services company Cantor Fitzgerald and is therefore well versed in the industry. He recommends that investors now stock up on shares in Riot Platforms and Cleanspark, which offer clear upside potential.
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Riot Platforms convinces analysts with growth strategy
Riot Platforms, which was called Riot Blockchain until early January 2023, is one of the largest mining companies in North America. According to “TipRanks”, the miner was able to more than triple its hash rate last year, and by the end of the first quarter it should – thanks to new buildings and more miners – rise again sharply from the last 9.6 EH/s to 12.5 EH /s. According to the company, in December 2022 alone it mined 659 Bitcoin, 55 percent more than in the same period last year. 600 bitcoins were sold in the last month of last year, giving Riot net proceeds of around $10.2 million. At the end of the year, the mining group still owned around 6,952 Bitcoin, which according to the company were all generated by its own mining activities.
Given these numbers, Cantor analyst Josh Siegler was particularly bullish on Riot Platforms, calling it his “crypto top pick,” according to TipRanks. He positively noted that Riot would not need to raise additional debt or equity to meet its guidance and that the company’s gross margin is among the best in its class. “With scale being of paramount importance in this industry, we are confident in RIOT’s ability to mine more Bitcoin than others and reinvest those proceeds to continue to scale up,” said Siegler.
Riot Platforms stock hasn’t had an easy time over the past year. After standing at more than $22 at the beginning of 2022, it plummeted to a low for the year of $3.25 by December. Since then, however, things have been looking up again. Since the beginning of the year, the share has gained around 120.94 percent in value and most recently cost 7.45 US dollars (as of the closing price on February 2, 2023). But despite this run, according to Josh Siegler, the paper still has more room for improvement. He believes Riot Platforms stock can climb another 61 percent to $12, giving it an overweight rating.
Cleanspark attractive despite lowered hashrate outlook
Josh Siegler also rated Cleanspark’s papers as “Overweight”. According to “TipRanks”, the company has only been active in the mining business since the end of 2020, but has now expanded mining Bitcoins into its main field of activity. Cleanspark advertises that it is a sustainable mining company and mines the cryptocurrency primarily using renewable or low-carbon energy sources. According to a company press release, 2022 was characterized by strong growth. Cleanspark has increased annual Bitcoin production by 200 percent and mined a total of 4,621 Bitcoin. However, much of Bitcoin production has been sold to fund growth and operations. At the end of the year, Cleanspark only held 228 bitcoins, according to its own statements. Cleanspark will increase the hash rate to 6.2 EH/s by the end of 2022, and by the end of the current year it should be 16 EH/s. That’s slightly less than originally announced, as the company says the outlook had to be reduced due to infrastructure build-out delays.
For Cantor analyst Siegler, however, the lowered hashrate outlook for 2023 is not serious. Even 16 EH/s would “still solidify Cleanspark as one of the largest vertically integrated self-miners in the industry,” he wrote, according to TipRanks. In addition, it is believed that “the company has better foresight and control over the development of its own mining sites”.
The crypto expert gave $5 as a price target for Cleanspark shares. The paper is currently at 3.52 US dollars, after having gained around 78.4 percent since the beginning of the new year after a pitch-black year in 2022 (as of the closing price on February 2nd, 2023). If the Cantor analyst is right, further price gains of around 42 percent are possible in the next few months.
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