MARA, a Bitcoin mining company, saw its stock outperform its competitors on Friday, despite missing earnings estimates for the first quarter. Investors seemed unfazed by the disappointing earnings and instead focused on the company’s efforts to reduce costs, which analysts believe will pay off in the long run. At press time, MARA stock is up by 9%, trading at $15.52 on Friday, May 9.
Jefferies analysts pointed out that the recent increase in Bitcoin price, combined with MARA’s shift toward using more sustainable energy sources. It includes solar and flared gas-driven data centers, will likely lower the company’s power costs in the coming months.
Jonathan Petersen, an analyst at Jefferies, said that the company’s infrastructure expansion, including a 114 MW wind farm and a newly energized 25 MW micro flared gas data center would help drive down energy costs, improving profit margins moving forward. “MARA is expanding infrastructure at its 114 MW wind farm and has fully energized its 25 MW micro flared gas data center,” Petersen explained.
Analysts are optimistic that if MARA continues to invest in energy assets, it will be able to cut costs even further, improving its profitability. Petersen raised his price target for the stock to $16 from $13, maintaining a “hold” rating.
The Bitcoin mining sector has struggled recently, with many miners’ profit margins squeezed by falling prices and rising energy costs. In response, some miners have turned to alternative sources of revenue, such as artificial intelligence and high-performance computing (HPC).
MARA, however, has stayed focused on diversifying within its core business, focusing on revenue from transaction services, mining pools, and cutting energy costs via green energy sources.
H.C. Wainwright analyst Kevin Dede emphasized MARA’s strategy to stay ahead of competitors. “The company remains focused on technology development in its core vertical of power conversion,” Dede said.
He believes MARA’s approach will continue to give it an edge in the industry. Dede, who has a buy rating on the stock with a target of $28, also agreed that the company’s focus on improving power efficiency will help them succeed.
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