Analyst: Bitfarms Shares 'Undervalued' as Company Bets on AI, Energy

HC Wainwright & Co. analyst Mike Colonnes has included Bitfarms shares among his top Bitcoin mining stocks for 2025, citing significant operational improvements and a shift toward high-efficiency computing and AI infrastructure.

In a research note following Bitfarms' Q4 2024 earnings report and conference call, Colonnes noted that the market is “significantly undervaluing” the company's scalable mining operations and its new AI strategy.

HC Wainwright reiterated his Buy rating on Bitfarms shares with a price target of $3.50 per share, implying more than three times the current price of around $0.98.

4th Quarter Review

Bitfarms reported its fourth quarter 2024 results on March 27. Revenue was $56.2 million, up 25% from the previous quarter, in line with analyst estimates. Revenue from self-mining increased to $54.6 million, driven by higher average Bitcoin (BTC) prices and a 13% increase in deployed hashrate to 12.8 EH/s by year-end. Gross mining profit was $25.8 million, with a margin of 47.3%, up from 38.4% in the previous quarter.

Despite a decline in Bitcoin production to 654 BTC due to increased network difficulty, the company still reported net income of $15.2 million, or $0.03 per share, a significant improvement from the $36.6 million net loss in the third quarter. Adjusted EBITDA nearly tripled to $14.3 million.

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Bitfarms has increased its computing power to 18.6 EH/s, almost losing its computing power from 6.5 EH/s at the end of 2023. The fleet upgrade has also increased overall efficiency by 45%, while the hashing cost is now averaging around $20-$22 per petahash, significantly lower than the current market hashing price of around $50 per petahash.

However, Bitfarms shares have fallen 57% since November, while the Nasdaq has fallen 7% over the same period. Colonnes believes that the company’s current valuation of ~$25 million per deployed EH is a steep discount compared to peers that trade closer to $85 million per EH.

Energy assets to support AI development

Expanding its horizons beyond mining, Bitfarms is positioning itself as an energy and computing company in North America.

The company's management said on the call that it has no plans to purchase more ASIC miners in the near future, and that future development will focus on building out power infrastructure to support AI and high-performance computing workloads.

This includes the recent acquisition of Stronghold assets and the sale of its Paraguayan Yguazu facility, which increases the U.S. share of its energy portfolio from 6% to 33%. Bitfarms now aims to reach 1.4 GW of total energy capacity by 2028, with nearly 80% in the U.S.

Colonnes noted that HPC/AI capabilities are not yet factored into current forecasts, and a potential partnership with a hyperscale vendor could provide significant growth.

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Source: cryptonews.net