Hut 8’s ‘self-extraction plans’ make it competitive after the game: Benchmark
US bitcoin (BTC) miner Hat8 plans to expand its own mining operations and diversify its revenue streams to make it more competitive in a post-halving world, investment banking firm Benchmark said.
In a research note issued on April 22, Mark Palmer, a senior analyst at Benchmark, explained that the “new HUT” – the firm formed from the merger between the “old HUT” and the US Bitcoin Corporation – boasted a “different business model” with many. Income streams.
Benchmark initiated coverage on Hut 8 stock and set a price target of 12 — a roughly 30% upside from the current $9.22 share price, according to TradingView data.
Hut 8's current autominer hash rate of 5.4 ekhashes per second (EH/S) is significantly lower than autominer leader Marathon Digital's rated speed of 27.8 EH/s, but despite this, Palmer says he expects it. A gap that closes over time.
“Hut trades at a discount to its Bitcoin mining peers, which we expect will decrease as the company executes its own mining expansion plans.”
Palmer cites Hut 8's multiple revenue streams, which include auto-mining, cloud computing, high-performance computing, and artificial intelligence services, as justification for the price target.
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“We believe the diversity of the Hat8 platform will benefit it over the long-term, with revenue streams outside of the auto-mining position better positioned than most of its listed peers to withstand a severe fall in the price of Bitcoin, in our view,” Palmer said.
Additionally, Palmer revealed that Hut 8 has an enterprise value-to-earnings multiple of 2.6, which is below the 3.1 average of its publicly traded Bitcoin mining peers such as Marathon Digital, Riot Platforms and several others.
Palmer admits that Hat8 still needs to improve its hash rate, saying it has a “high liquidity cushion” of 9,102 bitcoins held in reserve, as well as the ability to contain reversals if the price of BTC rises sharply in BTC. coming months.
In the year On February 7, Hat 8 announced a leadership shakeup, with former CEO Jamie Leverton stepping down as president and a member of the company's board of directors, and being replaced by Asher Jeannott.
The management restructuring comes weeks after short-selling JCapital published a report saying Hut 8 is in “legal trouble” and warned investors of a “pump and dump to come” in the Florida-based Bitcoin miner.
Hut 8 dismissed the stockbroker's report as a “deliberate attempt to spread misinformation”.
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