Riot Platforms is undervalued, this analyst says

Riot Platforms (Riot Platforms Stock Quote, Chart, News, Analysts, Financials NASDAQ:RIOT) reported Q2 2025 revenue of $153.0-million after the close on July 31, slightly ahead of the $151.3-million consensus, with Bitcoin mining revenue of $140.9-million topping ATB Capital Markets’ $137.0-million estimate.

ATB analyst Martin Toner noted that despite the revenue beat, Adjusted EBITDA, excluding Bitcoin fair value adjustments, came in well below expectations at $24.5-million versus his forecast of $41.9-million. He attributed the shortfall to higher-than-expected SG&A expenses, which reached $75-million compared to ATB’s $71.5-million estimate. Toner also pointed out that Riot reduced its end-of-year hash rate guidance to approximately 38.4 EH/s. As of quarter-end, the company held 19,273 Bitcoin valued at about $2.1-billion and reported $317.9-million in unrestricted cash and marketable securities.

Toner maintained his “Outperform” rating on the stock and (US) $20.00 price target.

Riot Platforms is a Bitcoin mining and digital infrastructure company with operations in central Texas and Kentucky. It also operates electrical engineering and fabrication facilities in Denver, Colorado, and Houston, Texas, as part of its vertically integrated strategy.

“We remain positive on the probability of a value-enhancing data centre build-out at Corsicana and Rockdale, and we believe RIOT’s balance sheet is in good shape to guide the company’s transition,” Toner said. “On the call RIOT revealed plans to materially reduce its stock compensation plan from mid-2026 onwards, another shareholder-friendly move as the company repositions itself to new investors as it makes the transition towards the HPC data-centre business. The company emphasized taking a patient long-term approach to maximizing value of its potential data centre capacity.”

The increase in Riot’s mining revenue in Q2 was driven by higher average Bitcoin prices, up 31% over the quarter, and a higher operational hash rate. Riot produced 1,426 BTC, compared to 844 in the same period last year.

The company reported a Bitcoin mining gross margin of 44%, or 55% on a non-GAAP basis, including $6.4-million in power credits. That’s down from 62% in Q2 2024 and 48% in the previous quarter. Riot’s cost to mine one Bitcoin rose to $48,992, up from $30,120 a year earlier, due to a higher global hash rate and slightly more power curtailments.

Riot CEO Jason Les said the company’s high-performance computing and AI strategy is focused on shifting power capacity toward higher-value data center operations while continuing to support Bitcoin growth.

“Our strategy centres on optimizing our ready-for-service power portfolio – anchored by flagship sites in Rockdale and Corsicana – while progressively shifting capacity toward high-value data centres, bolstered by our addition of hyperscale expertise through recent hires, in particular Jonathan Gibbs as Chief Data Centre Officer,” he said. “With a robust balance sheet, battle-hardened teams, and significant access to capital markets, we are uniquely positioned at the intersection of surging high-performance computing demand and Bitcoin growth to maximize utilization of our significant power capacity, expand thoughtfully, and drive compelling long-term value for our shareholders.”

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