Jefferies Sees Nearly 160% Upside for Marathon Digital's Shares

Marathon Digital (MARA) is on pace to become the largest publicly listed bitcoin miner this year, Jefferies said in a note on Friday.

• An analyst from Jefferies started coverage with a 12-month price target of $51, implying a 158% increase from the stock's recent closing price.
• “MARA is on track to be the largest publicly traded miner by the end of 2022, with deposits paid on more BTC ASIC miners than any of its peers,'' analyst Jonathan Petersen wrote, referring to bitcoin application-specific integrated circuit miners.
• Marathon is “highly profitable” despite the recent sell-off in its shares as the company’s current mining margin is around 80%, compared with about 90% in November, according to the note.
• “We estimate that BTC will rise at a +32% CAGR (compound annual growth rate) through '24 and that MARA's revenue and EBITDA (earnings before interest, taxes, depreciation and amortization) will rise at a +120% and +95% CAGR, respectively,” Petersen said.
• The stock has been initiated with a buy rating by Jefferies.
• On Dec. 29, Marathon Digital said it expects to have 199,000 operational miners generating 23.3 exahashes per second by early 2023. An exahash is a measure of computing power.
• Marathon’s stock had fallen about 74% since reaching its November peak, according to TradingView data, as the crypto miners tumbled with the sharp sell-off in bitcoin and the broader crypto market.

Read more: Miners Remain Unfazed by Crypto Sell-Off, Expect More M&A