RIOT stock is “best in class”, Roth says

Following an operation update from the company, Roth MKM analyst Darren Aftahi has maintained his “Buy” rating on Riot Platforms (Riot Platforms Stock Quote, Chart, News, Analysts, Financials NYSE:RIOT)

Riot, on December 6, announced that it had produced 552 bitcoins in November, or an average of 18.4 per day, up from 17.4 per day in November of 2022.

“Riot continued to increase monthly Bitcoin production in November, mining 552 Bitcoin during the month, a 21% increase over October’s production,” CEO Jason Les said. “Despite the headwinds of a nearly 9% increase in network difficulty, the ongoing return of hash rate in Building G at our Rockdale Facility and reduced curtailment activity helped drive this strong increase in our production activity.”

The analyst says this data is more evidence of Riot’s excellent execution.

“We maintain our belief that RIOT remains a best-in-class miner given its hash rate growth trajectory and financial position to reach those goals,” he said, “RIOT’s latest miner announcement adds ~66K top-ofthe-line miners for delivery to its Corsicana facility in 2024 through 2025, which takes RIOT’s current hash rate of ~12.4 EH/s and adds ~16 EH/s with Corsicana by the end of 2024 (exiting) and a pathway to ~38 EH/s by the end of 2025. Moreover, RIOT has locked in purchase options for an additional ~265K miners at a price floor of ~$16/TH (its latest rate) through 2027, which if executed upon provides a long-term pathway to over 100 EH/s. RIOT continues to showcase its ability to execute on its growth plans, gaining market share into and out of the next halving. Additionally, RIOT has the liquidity to support this growth through 2024 (site CapEx and Machine orders) with ~$650-$700M in total liquidity for CapEx through Phase 1 and 2 for Corsicana of ~$501M. Also, we continue to see the potential for “organic” hash rate expansion in late 2024 or early 2025 with the possibility of adding self-mining space to Rockdale in replacement of its hosting business.”

In a research update to clients December 6, Aftahi maintained his “Buy” rating on RIOT, but raised his price target on the stock from $19.50 to $22.50.

The analyst thinks RIOT will post EBITDA of $91.7-million on revenue of $300.6-million in fiscal 2023. In fiscal 2024, he expects the company will produce EBITDA of $69.1-million on a topline of $373.1-million.