Analyst upgrades Hut 8 mining stock to ‘Buy’, raises price target

HC Wainwright & Co. analysts believe Hut 8 Mining’s stock is now valuable thanks to some strategic advances the company has made.

Hut 8 Mining Corp. was upgraded twice from “Sell” to “Buy” by analysts at HC Wainwright following the release of its second-quarter financial results. The price target was also raised to $13.50 per share from $7.50, implying a ~23% upside potential from current levels driven by the company’s recent strategic developments.

Positive developments of Hut 8

This upgrade is being driven by several positive catalysts, including the completion of the Hut 8 reconstruction program and the success of reducing electricity costs to a now competitive level of $0.032/kWh following the energization of a new 63 MW facility in Texas.

Additionally, the company’s strong liquidity position ($722 million, including 9,102 Bitcoin (BTC) in total) puts it in a good position to take advantage of market opportunities by purchasing and deploying the latest mining equipment.

Additionally, Hut 8’s potential to land a high-performance computing or AI customer has increased following a $150 million investment from Coatue, strengthening the company’s potential to land multi-year, high-margin contracts.

Stock market declines

Despite Hut 8’s stock price dropping 50% in the past month, analysts see the current valuation as an attractive entry point for investors, especially considering the company’s potential to nearly triple its operating hash rate by 2025.

As Hut 8 continues to optimise its operations and explore new market opportunities, the appointment of Sean Glennan as CFO, effective 21 August, is expected to further strengthen the company’s financial strategy.

Hut 8’s Q2 2024 revenue fell 32% from the previous quarter to $35.2 million, while GAAP EPS loss was $0.78 per share.