Along with the continued dominance of artificial intelligence (AI) stocks, the incredible surge in Bitcoin (BTCUSD) has been a major storyline on Wall Street so far in 2024. While the volatile asset is pulling back in today's trading, BTC has tapped new highs above $70,000 in recent sessions, driven by the popularity of newly launched spot Bitcoin ETFs and optimism over the upcoming “halving” event.
Although the debut of Bitcoin-based ETFs initially drew focus away from crypto mining stocks, analysts at Bernstein recently argued that miners are still the best equity proxy for BTC - and the pre-halving underperformance in the group represents a rare window of opportunity to scoop up these names at a discount. Against this backdrop, here's a closer look at one lesser-known Bitcoin mining company that Wall Street expects to surge from here.
About Bitdeer Technologies Stock
Bitdeer Technologies Group (BTDR) is a Bitcoin mining specialist, focusing primarily on blockchain and high-performance computing. The company also offers advanced cloud capabilities to customers with high demand for artificial intelligence. Headquartered in Singapore, Bitdeer has deployed data centers in the U.S., Norway, and Bhutan. Its market cap currently stands at $823 million.
BTDR stock is down 25.9% on a YTD basis, significantly lagging the broader equities market.
Strong Q4 Results
Earlier this month, Bitdeer announced its preliminary results for the fourth quarter (ended Dec. 31). In the quarter, Bitdeer reported revenues of $114.8 million, up 49% year-over-year, as self-mining revenues more than quadrupled to $46.9 million. The company reported earnings per share (EPS) of $0.11 in Q4, reversing its loss of $0.07 per share in the year-ago period.
Moreover, the company closed the quarter with a cash balance of $144.7 million (up 7.6% sequentially) and it self-mined approximately 1,299 Bitcoins in the period (up 19.7% from Q3). The company is expected to report its full results on March 22.
Since the company has yet to be consistently profitable, some of the traditional valuation metrics do not apply to Bitdeer. However, the stock's forward price/sales ratio of 2.23 is a significant discount to its crypto mining peers, including Cipher Mining (CIFR), Bitfarms (BITF), Riot Platforms (RIOT), and Marathon Digital (MARA).
Strategic Moves at Bitdeer
Beyond industry-wide forecasts for higher Bitcoin prices to support crypto miners in 2024, Bitdeer also has a few company-specific catalysts that could work in its favor.
The appointment of founder Jihan Wu as CEO of the company is one of them. Shares of BTDR rallied in late January on news of Wu's appointment, which will add to his existing role as Chairman of the Board.
To boost profit margins, the company recently opened a data center in Bhutan. This strategic move leverages Bhutan's lower electricity costs, potentially bringing the average below the current $32/MWh. This immediate cost reduction will directly contribute to short-term margin growth.
Looking ahead, the under-construction Tydal data center in Norway offers another long-term advantage: immersion cooling. This technology further optimizes electricity usage, solidifying the company's commitment to cost efficiency.
Bitdeer also bolstered its cloud capabilities last year, when it announced a partnership with Nvidia (NVDA) to address the increasing demand for AI supercomputing.
What Do Analysts Expect for BTDR Stock?
Analysts are optimistic about Bitdeer stock. Recently, Benchmark initiated coverage of Bitdeer stock with a “Buy” rating and a $13 price target, which denotes an upside potential of about 103% from current levels.
Benchmark analyst Mark Palmer wrote, “We view the Singapore-based company as differentiated from its publicly traded peers due to its scalable infrastructure with one of the lowest all-in mining costs in the space, diverse revenue streams including self-mining, hash rate sharing, and hosting, and its recent expansion in artificial intelligence (AI)/high-performance computing (HPC) solutions and into the design and manufacture of advanced mining rigs."
H.C. Wainwright analyst Mike Colonnese also weighed in bullishly after the preliminary Q4 results from BTDR, noting that the stock seems undervalued on the basis of its forward enterprise value/revenue multiple - currently at 2.03. The analyst has a $20 price target on Bitdeer stock, implying expected upside of 171.7% from current prices.
Overall, 5 analysts have unanimously deemed the stock a “Strong Buy,” with a mean target price of $14.50. That indicates upside potential of about 97% from current levels.
