Is BITF stock a buy? (September, 2024)

Following the company’s monthly update, ATB Capital analyst Martin Toner remains bullish on Bitfarms (Bitfarms Stock Quote, Chart, News, Analysts, Financials TSX:BITF).

On September 3, BITF provided a production and operations update, noting that it had produced 233 BTC.

“The acquisition of Stronghold Digital Mining marks an important advancement for Bitfarms, solidifying our position as a dominant player in both the bitcoin mining and HPC/AI sectors,” CEO Ben Gagnon said. “This acquisition will enable us to enhance and rebalance our energy portfolio, targeting an expansion to 950 MW by the end of 2025, with nearly 50 per cent of our capacity based in the U.S. Additionally, we are positioning ourselves for multiyear growth with total expansion capacity of up to 1.6 GW, approximately 66 pr cent of which is located in the U.S., a substantial increase from the current 6 per cent. By vertically integrating with power generation, advancing our energy trading capabilities and securing two sites with substantial multiyear expansion potential, Bitfarms is executing a strategy that positions us to diversify our operations beyond Bitcoin mining and maximize long-term shareholder value.”

Toner summarized the development.

“On September 3, Bitfarms provided its monthly production report and operations update for the month of August,” he wrote. “The Company mined 233 BTC in the month, down 20 m/m, driven by the increase in average network difficulty during the month (which was up 1.3% m/m), partially offset by higher corporate hashrate due to the receipt of 2,744 T21 miners from Bitmain. The Company exited the month with an operating hash rate of 11.3 EH/s, up from 11.1 EH/s in July. On August 27, BITF announced it has assumed control of Sharon, PA, which offers access to up to 120 MW. According to the Company, BITF has finalized the acquisition of 110 MW, with 30 MW expected to come online by the end of 2024. Today, the Company has also signed a Letter of Intent for an additional 10 MW site, which will increase the total site capacity to 120 MW by 2025. We estimate BITF will need to operate at an average operating rate of ~13 EH/s in September to meet our Q3/24 estimate of 805 BTC produced, which we believe is achievable. In order to achieve its year-end 2024, 21 EH target and ATB estimates, BITF will need to average energizing 2.5 EH per month until year-end.”

In a research update to clients September 3, Toner maintained his “Outperform” rating and price target of $7.00 on BITF.