Stronghold Digital Outperforms Peers After DA Davidson Buy Rating
The investment bank initiated its coverage of the bitcoin mining company with a 12-month price target of $42.
Nov 15, 2021 at 7:12 p.m. UTCUpdated May 11, 2023 at 7:06 p.m. UTC
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Stronghold Digital (SDIG), the bitcoin mining company that converts coal waste into power for its operations, outperformed its mining peers on Monday after the investment bank DA Davidson slapped a buy rating on the company and said it sees potential for shares to rise more than 50% over the next 12 months.
- “With the cheapest valuation in our miner coverage, SDIG has the potential to outperform as it executes on its unique strategy,” DA Davidson senior analyst Christopher Brendler wrote.
- Brendler said Stronghold’s strategy to own and operate its own power-generation plant reduces return on invested capital. At the same time that strategy lowers risks to the company during a bear market and increases long-term potential.
- The analyst said that supply-chain disruptions have slowed the delivery of miners for Stronghold, but he expects the delays to be “measured in weeks not months” for the company.
- Stronghold’s stock pared earlier gains but was still faring better than most crypto miners on Monday.
- On Oct. 20, Stronghold shares opened 42% higher than its initial public offering price of $19.
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Aoyon Ashraf is managing editor with more than a decade of experience in covering equity markets