Riot Platforms, Inc. (RIOT)

Riot Platforms, Inc. (RIOT)

Cantor’s first crypto pick is Riot Platforms, one of North America’s largest cryptocurrency mining firms. The company is focused on broadening its operations via increasing its bitcoin mining hash rate and increasing its infrastructure capacity.

The company had only 3.1 EH/s self-mining capacity at the end of 2021 but that has seriously accelerated over the past months, and Riot saw out 2022 with 9.7 EH/s, boosted by the deployment of recent miner purchases that brought its total deployed fleet to 88,556 miners. With further expansion, the company is targeting a hash rate of 12.5 EH/s by the end of Q1 as the Rockdale, Texas, facility adds a new building and the company installs more miners. Riot is also in the process of putting together 200 MW of immersion-cooling infrastructure. Additionally, the company hosts approximately 200 MW of institutional Bitcoin mining clients. Riot recently went through a rebranding, changing its name from Riot Blockchain to Riot Platforms.

In addition to quarterly results, the company provides monthly updates of its operations. The latest, for December, showed Riot mined 659 BTC, amounting to a 55% uptick compared to December 2021. The company sold 600 BTC, netting roughly $10.2 million.

Riot shares got absolutely decimated last year, but have rallied by 88% since the December lows. That said, Cantor’s Josh Siegler thinks they have more room to run.

Making RIOT his “Crypto Top Pick,” Siegler lays out the bull case. He writes, “With scale being paramount in this industry, we are positive on RIOT’s ability to mine more Bitcoin than others and reinvest those proceeds to further increase scale. Gross margin remains best-in-class at ~65%, largely due to unique energy agreements it has entered into… Unlike other miners, RIOT does not need to raise additional debt or equity to achieve its guidance.”

Siegler doesn’t just write up an optimistic outlook; he backs it with an Overweight (i.e., Buy) rating on RIOT shares and a $12 price target that implies a one-year upside potential of 61% from current levels.

Overall, it’s clear that Wall Street agrees with Siegler on the forward prospects for RIOT. The stock’s 8 recent analyst reviews include 7 Buys and 1 Hold, for a Strong Buy consensus indicative of a bullish outlook. The shares are priced at $6.20 and their $10.06 average price target implies a 12-month upside of 62%.