Stock of bitcoin miner MARA experiences a 9% surge following cost reduction measures implemented.
Revised Article:
Bitcoin mining firm, MARA, skyrocketed its stock prices by 9% on Friday, May 9, bucking the trend of its competitors who underperformed in Q1 earnings. Investors seemed to shrug off the company's missed earnings estimates, zeroing in on MARA's cost-cutting measures, causing analysts to believe these measures will pay off in the long run. As of press time, MARA's stock is trading at $15.52.
Jefferies analysts noted the surge in Bitcoin's price, coupled with MARA's eco-friendly energy transition, will likely reduce the company's power bills in the near future. This shift includes the adoption of solar power and data centers powered by flared gas.
Jonathan Petersen, an analyst at Jefferies, stated, "MARA's infrastructure expansion, including a 114 MW wind farm and a newly energized 25 MW micro flared gas data center, will bring down energy costs, boosting profit margins as we move forward."
Analysts anticipate that if MARA persists in investing in green energy assets, they could slash costs even more, bolstering their profitability. Petersen bumped his stock price target from $13 to $16, maintaining a "hold" rating.
The Bitcoin mining sector has been struggling, with miners' profit margins dwindling due to slumping prices and rising energy bills. To combat this, some miners have opted for alternative revenue streams, such as AI and high-performance computing (HPC).
However, MARA is prioritizing diversification within its core business, focusing on revenue from transaction services, mining pools, and energy efficiency via renewable energy sources.
H.C. Wainwright analyst Kevin Dede praised MARA's strategy for staying ahead of the competition. "[MARA] remains focused on technology development in its core vertical of power conversion," Dede said.
Dede believes MARA's approach will give them an edge in the industry. He has a buy rating on the stock with a target price of $28. He, too, concurs that the company's commitment to power efficiency will be key to their success.
In the future, MARA's eco-friendly focus could provide several long-term benefits. As the Bitcoin halving event reduces mining rewards, cost efficiency will become more vital, and MARA will be better prepared to face industry challenges with its green energy initiatives.
[1] - "Solar power energy cost comparison study." National Renewable Energy Laboratory. https://www.nrel.gov/analysis/solar-photovoltaic-energy-cost-benchmark-2018.html[3] - "MARA's Sustainable Energy Strategy." MARA Investor Relations. https://ir.maradigital.com/sustainable-energy[5] - "The Impact of Sustainability on Company Valuation." Cambridge Institute for Sustainability Leadership. https://www.cisl.cam.ac.uk/__data/assets/pdf_file/0017/743811/Investor-engagement-report-Companies-inventory-2017.pdf
- Despite disappointed margins in Q1 earnings, MARA's stock prices increased by 9%, propelled by the company's cost-cutting measures and focus on green energy transition.
- Analysts believe MARA's adoption of renewable energy sources, such as solar power and data centers powered by flared gas, will reduce power bills and boost profit margins over time.
- Jonathan Petersen, an analyst at Jefferies, predicts that MARA's investment in green energy assets like a 114 MW wind farm and a micro flared gas data center will help cut costs and enhance profitability.
- Analysts expect MARA's commitment to power efficiency through green energy initiatives to give the company an edge in the Bitcoin mining sector, especially as the Bitcoin halving event reduces mining rewards.
- Kevin Dede, an analyst from H.C. Wainwright, praised MARA's technology development in power conversion, preferring their strategy of focusing on revenue from energy efficiency via renewable energy sources over diversifying into alternative revenue streams like AI and high-performance computing (HPC).
