Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside |
|---|---|---|---|---|---|---|---|
| 18 Sep, 24 | BITF | Speculative Buy | USD 1.96 | USD 2.1 | USD 2.3 | 1 day | 17.3% |
Data Powered by EOD Historical Data (“EODHD”).
Bitfarms Ltd. engages in the mining of cryptocurrency coins and tokens in Canada, the United States, Paraguay, and Argentina. It owns and operates server farms that primarily validates transactions on the Bitcoin Blockchain and earning cryptocurrency from block rewards and transaction fees. The company also provides electrician services to commercial and residential customers in Quebec, Canada. It also undertakes hosting of third-party mining hardware. The company was formerly known as Bitfarms Technologies Ltd and changed its name to Bitfarms Ltd. in October 2018. The company was founded in 2017 and is based in Toronto, Canada.
Rising Revenues: USD 41.55 mn in Q2 FY24 vs USD 35.48 mn in Q2 FY24
Enhanced Liquidty: Current Ratio of 3.02x in Q1 FY24 vs Industry Median of 1.71x
Negative Profitability: Net Margin of 11.9% in Q1 FY24
Decreasing Shareholders' Wealth: ROE of -1.8% in Q1 FY24 vs Industry Median of 0.6%
Debt Levels, Infrastructure Reliability, Geographic Concentration, Acquisition Risks, Energy Supply Agreements, Market Demand for Mining Services, etc.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 1.96 | 1.6 | 2.1 | 2.3 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
August 2024 Operational Highlights:
a) Bitfarms continued to expand its operational capacity in August 2024, achieving several key milestones:
b) The company maintained an average operational hashrate of 10.4 EH/s, up 104% year-on-year and 1% month-on-month.
c) Despite the higher network difficulty, Bitfarms earned 233 BTC, representing an 8% month-on-month decline and a 39% year-on-year decrease.
d) On average, 7.5 BTC were earned daily, generating approximately USD 443,000 per day, based on a Bitcoin price of USD 59,000 at the end of August 2024.
Progress in Global Operations: Bitfarms is actively expanding its operations across multiple locations. In August, 5,040 T21 miners were in transit, with 3,060 destined for Canada, 648 for Washington, and 1,332 for Argentina. Construction at the Yguazu site in Paraguay is progressing swiftly and remains on schedule, further demonstrating Bitfarms' commitment to scaling its global mining operations.
Financial Performance and Treasury Update: In August 2024, Bitfarms sold 147 of the 233 BTC earned as part of its treasury management strategy, generating total proceeds of USD 8.8 million. The company added 86 BTC to its treasury, bringing the total to 1,103 BTC, valued at USD 65.1 million, based on a BTC price of USD 59,000 at the end of the month. Furthermore, Bitfarms held 647 long-dated BTC call options as part of its Synthetic HODL™ strategy, further enhancing its financial positioning.
Year-to-Date Bitcoin Production: Bitfarms’ year-to-date Bitcoin production totaled 2,043 BTC as of August 2024, a notable decline from 3,281 BTC during the same period in 2023. The decline in production reflects the increasing complexity of the Bitcoin network, along with fluctuating market conditions, which have impacted overall mining output. Despite this, the company continues to prioritize operational efficiency and strategic investments in new technology to enhance future productivity.
Technical Observation (on the daily chart):
The Relative Strength Index (RSI) over a 14-day period stands at a value of 41.75, currently upward trending, with expectations of a consolidation or an upward momentum if the current important support levels of USD 1.80- USD2.00 holds. Additionally, the stock's current positioning is below both the 50-period SMA and 200-period SMA, which may serve as dynamic short to medium-term resistance levels.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Speculative Buy’ rating has been given to Bitfarms Ltd. (NASDAQ: BITF) at the closing market price of USD 1.96 as of September 18, 2024.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Financial Services Industry: Capital Markets
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| BITF Bitfarms Ltd |
-0.0912 5.43% | 1.59 | - | 84.03 | 5.58 | 2.11 | 5.30 | 58.96 |
| MS Morgan Stanley |
-0.225 0.18% | 123.22 | 16.50 | 13.76 | 2.80 | 1.65 | ||
| SCHW Charles Schwab Corp |
-0.315 0.42% | 74.00 | 22.86 | 17.39 | 6.14 | 4.28 | ||
| GS Goldman Sachs Group Inc |
-2.2467 0.40% | 563.85 | 18.44 | 10.60 | 2.83 | 1.16 | ||
| CIIHY CITIC Securities Co Ltd ADR |
- -% | 30.18 | 15.86 | 7.89 | 0.98 | 1.07 | 10.27 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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