HC Wainwright has reiterated a buy rating with a target price of for the Bitfarms (NASDAQ:BITF) stock.

According to HC Wainwright analyst Mike Colonnese, Bitfarms is currently one of the “most attractively valued stocks in BTC mining.”

The company’s indication that it’s open to a sale if that maximizes shareholder value suggests that any successful bid could come at a hefty premium compared to where BITF currently trades.

Colonnese, who initiated coverage for the Bitcoin mining firm’s stock early this month, issued the bullish forecast for BITF in a research note published on Monday, June 17.

Analysts reiterate buy rating for Bitfarms stock

HC Wainwright analyst Mike Colonnese says that Bitfarm is one of the most undervalued publicly traded Bitcoin miners.

The analyst sees Bitfarm’s recent agreement for a .7 million deal in an all-stock transaction for 120 MW of power as a pointer to the company’s robust growth initiatives.

Shares of Bitfarms rose 15% when the company announced its expansion efforts last week. As reported, the miner’s agreement will see it bring up to 120 MW of power online via the new site in Sharon, Pennsylvania.

The above agreement will see Bitfarms add 0.6 EH/s to its capacity in the fourth quarter of 2024 and a total of 8 EH/s in the second half of 2025.

Another 6 EH/s will come online in 2025 via the recently announced 100 MW expansion at Yguazu. Bitfarm’s end of year projection for 2024 is 21 EH/s management’s guidance for 35 EH/ s by the end of 2025.

“Owned and operated infrastructure expected to grow to ~650 MW in 2025. Factoring in the new development site in Sharon, PA, we estimate BItfarms is now poised to increase total power capacity by 170% to 648 MW in 2025, up from 240 MW operating today,” the analyst wrote.

Risks

Despite the recent market upheavals and the Riot takeover saga, the stock’s price is up 30% in June and nearly 24% up in the past five days. BITF is up 5.7% year-to-date.

However, HC Wainwright suggests there might be risks to BITF hitting the price target.

These would include volatility in Bitcoin prices, delays at Bitfarms’ new mining facilities and a potential impact from shareholder dilution resulting from equity capital raises.

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 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 .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.