Hut 8 Mining Corp

First up, we have Hut 8, a Canadian bitcoin miner and one of the biggest industrial scale crypto mining enterprises in North America. Founded in 2017, HUT began the first stage of its self-owned mining operations in energy-rich Alberta, through a partnership with global blockchain technology company Bitfury. This offered Hut exclusive access to proprietary bitcoin mining hardware and operational support around the clock.

Hut 8’s lean operation consists of roughly 60 blockchain and data center experts. The company is also one of the mining industry’s most prominent bitcoin HODL’ers, boasting more than 6,200 bitcoin in its reserves.

HUT kicked off its self-mining operations with 18.7MW of power capacity in Drumheller, Alberta. Following expansions at the facility, in addition to a cumulative 67MW from another mining site in Medicine Hat, Alberta, HUT’s total power capacity swelled to almost 110MW. With development plans afoot in Northern Ontario, the stage is set for HUT’s total power capacity to almost double over the near term. At the same time, given the favorable power rates, the expansion will also significantly reduce overall direct mining costs. This all puts the company on track to expand operating capacity over the upcoming quarters from the present 2.5 EH/s to 4.6 EH/s, with management targeting 6.0 EH/s by the end of the year.

That the company is growing at a fast clip is easy to see given the huge growth spurt it has gone through over the past year. In the most recent financial report – for 4Q21 – revenue surged by 345.4% year-over-year to reach C$57.9 million.

In his coverage note on HUT, Sukumar is attracted to the promising growth profile while also noting the company is exploring other promising revenue generating opportunities.

“With a strong track record and healthy balance sheet from recent capital raises, we see the company well positioned to execute on its growth plan, allowing it to increase its operating scale and capacity with a more competitive cost profile in the coming quarters,” the analyst said. “We see additional near-term catalysts resulting from progress on the company’s diversification plan. Specifically, these include leveraging its recently purchased data center assets and industry relationships to secure new emerging business opportunities in the high-performance computing and web3 space.”

Everything that HUT has going for it prompted Sukumar to rate the stock a Speculative Buy. The cherry on top? His $11 price target implies ~80% upside from current levels.

4 other analysts have recently reviewed HUT’s prospects, and all are positive, making the consensus rating here a Strong Buy. The average price target is even more bullish than Sukumar will allow; at $12.30, the figure represents potential upside of 102% in the year ahead.