Bitfarms stock is ‘undervalued’ as firm pivots to AI and energy: analyst

HC Wainwright & Co. HC analyst, Mike Colonnais, added Bitfarms actions to the best choices of the company in the Bitcoin mining sector for 2025, citing solid operational improvements and a change to high performance IT and AI infrastructure.

In a following research note Bitfarms“Winning report and conference call for the fourth quarter of 2024, the Colonnais said that the market” considerably underestimates “the company’s mining operations and the emerging AI strategy.

HC Wainwright reiterated its purchase note on Bitfarms with a stock market target of $ 3.50, which implies upward potential of more than three times compared to its current price of around $ 0.98.

Summarize

Bitfarms reported on March 27, 4024 results. The turnover of $ 56.2 million increased by 25% in a quarter and in line with analysts’ expectations. Self-mining Income reached $ 54.6 million, driven by a higher average bitcoin (BTC) Prices and a 13% increase in chopping deployed at 12.8 EH / S at the end of the year. The benefit of raw mines improved at 25.8 million dollars with a margin of 47.3%, against 38.4% in the previous quarter.

While Bitcoin’s production fell to 654 BTC due to the increase in network difficulties, the company has always displayed a net profit of $ 15.2 million, or $ 0.03 per share, a solid rebound in a net loss of $ 36.6 million in the third quarter. The adjusted Ebitda almost tripled to $ 14.3 million.

Bitfarms increased its hatching capacity to 18.6 EH / S, almost tripling its computing power of 6.5 eh / s at the end of 2023. Fleet upgrades also improved the overall efficiency of 45%, with hash costs on average from $ 20 to $ 22 by Petahash, notably below the current price of $ 50 / pH.

Despite this, Bitfarms’ shares have been down 57% since November, compared to a 7% drop in the NASDAQ index over the same period. The colonnais considers the current valuation of the company of approximately $ 25 million per EH deployed as a drop in discounts compared to peers, which are negotiated closer to $ 85 million per EH.

Energy active ingredients to fuel AI growth

Looking beyond the mining, Bitfarms is positioned as a North American energy and calculation company.

The management said on the call that it was not planned to buy more ASIC minors, and that future growth will focus on building energy infrastructure to support AI and HPC workloads.

This change includes a recent acquisition of Stronghold assets and a sale of its Yguazu site based in Paraguay, increasing the United States of its energy portfolio from 6% to 33%. Bitfarms now aims to reach 1.4 GW of total energy capacity by 2028, with almost 80% located in the United States

The Colonnais noted that the HPC / AI opportunity is not yet reflected in current projections, and a potential partnership with a hyperscaller could provide a significant advantage.