Valued at a market cap of $1.01 billion, Bitdeer Technologies (BTDR) is a crypto mining stock. While Bitcoin (BTCUSD) prices have surged close to 55% year-to-date, shares of crypto mining stocks - including Bitdeer - are trailing the market.
For instance, BTDR stock is virtually unchanged in 2024. This relative underperformance allows investors to buy a crypto mining stock at a lower multiple, especially if digital asset prices move higher.
Why Are Crypto Mining Stocks Underperforming in 2024?
Bitcoin mining stocks provide investors with exposure to the cryptocurrency sector. Typically, the performance of crypto mining companies is tied to the prices of the digital assets that they mine.
In 2023, the stellar comeback of Bitcoin allowed crypto mining stocks to deliver outsized gains. However, in 2024, the Bitcoin halving event drove valuations across the mining industry lower. A Bitcoin halving event occurs every four years, during which the rewards paid out to miners for adding a new block to the underlying blockchain network are reduced by 50%.
This mechanism directly impacts the top-line revenue for Bitdeer and its peers, as miners are validating the same number of transactions for half the payout. In order to offset falling revenue, miners need BTC prices to at least double from current levels.
Moreover, Bitcoin miners continue to invest heavily in mining rigs and other equipment, which may result in higher debt loads or bloated cost structures.
So, let’s see if it makes sense to invest in Bitdeer stock right now.
Cantor Fitzgerald is Bullish on Bitdeer
Bitdeer derives revenue from three business lines that include:
- Self-mining: Here, Bitdeer validates transactions on the Bitcoin network and is rewarded with BTC.
- Hash Rate Sharing: The company offers hash rate subscription plans and shares mining income with customers.
- Hosting: It is a mining machine hosting solution that includes deployment, maintenance, and management services for efficient crypto mining.
Last week, investment firm Cantor Fitzgerald initiated coverage of Bitdeer Technologies with an “Overweight” rating. Cantor Fitzgerald analyst Brett Knoblauch is bullish on Bitdeer’s diversified business and the long-term potential of its commercial rig business. Plus, the Bitcoin miner has secured an energy contract totaling two gigawatts of capacity to power its mining operations.
The analyst believes Bitdeer has the potential to become one of the largest publicly traded BTC mining companies. It is on track to add 1.79 megawatts of additional power, increasing its mining capacity by 59.5 exahashes per second.
How Did Bitdeer Perform in Q1 of 2024?
Bitdeer reported revenue of $119.5 million in Q1 of 2024, up from $72.6 million in the year-ago period. It reported an adjusted net income of $8.4 million, compared to $2.8 million last year. Its adjusted EBITDA (earnings between interest, tax, depreciation, and amortization) rose from $18.5 million to $26 million in the last 12 months.
Bitdeer mined 911 Bitcoins, an increase of 65% year over year, and is on track to end 2024 with revenue of $445 million, up from $368 million in 2023.
Analysts expect its adjusted earnings per share to improve to $0.51 in 2025, compared to a loss of $0.21 per share in 2023. So, priced at 18 times forward earnings, BTDR stock is not too expensive.
What is the Target Price for BTDR Stock?
Out of the eight analysts tracking Bitdeer stock, seven recommend “strong buy,” and one recommends “moderate buy.”
The average target price for BTDR stock is $13.56, indicating an upside potential of 37.5% from current levels.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
