Bitcoin Miner Marathon Digital Targets Trimmed by Cowen

The bank did lift its share price target to $9, but that remains below the stock's current level of about $14.

AccessTimeIconAug 23, 2022 at 3:22 p.m. UTC
Updated May 11, 2023 at 5:43 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Investment bank Cowen lowered its revenue, adjusted EBITDA and mining margin expectations for bitcoin (BTC) miner Marathon Digital Holdings (MARA) following sluggish second-quarter results, and warned about the company's ambitious hashrate goals.

Marathon delivered disappointing results in the second quarter as several thousand of its mining rigs were sitting idly due to storms and energization delays. However, the firm has announced hosting deals that would help it reach its hashrate, or computing power, goal of 23.3 exahash per second (EH/s) by mid-2023.

  • Zuckerberg Says Meta Has 'Exciting Roadmap' With Threads, AI Products in Pipeline
    08:15
    Zuckerberg Says Meta Has 'Exciting Roadmap' With Threads, AI Products in Pipeline
  • Bitcoin Miner Bitfarms Warns of Default
    04:20
    Bitcoin Miner Bitfarms Warns of Default
  • How Bitcoin Mining Got 'Even More Competitive' In 2022: Analyst
    01:17
    How Bitcoin Mining Got 'Even More Competitive' In 2022: Analyst
  • Stronghold Digital CEO on State of Bitcoin Mining Amid FTX Fallout
    07:43
    Stronghold Digital CEO on State of Bitcoin Mining Amid FTX Fallout
  • However, these deals come with execution risk due to Marathon's reliance on third-party suppliers and a lack of infrastructure control, said Cowen analysts Stephen Glagola and George Kuhle in a note to clients. They take note that one of those third parties is Applied Blockchain (APLD), a "relative newcomer to the bitcoin mining hosting business with limited operating history."

    Reflecting those disappointing quarterly results, the Cowen team lowered its 2022 revenue estimate for Marathon to $150 million from $204 million, now below the consensus forecast for $189 million. Cowen also dropped its expectations for adjusted EBITDA to $39 million from $86 million, and mining profit to $91 million with 61% margin, down from $132 million and a 64.7% margin.

    Cowen continues to rate Marathon at Market Perform, but lifted its price target to $9 from $7 following a near-tripling in the stock price over the last seven weeks to the current $14 per share.


    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Eliza Gkritsi

    Eliza Gkritsi is a CoinDesk contributor focused on the intersection of crypto and AI.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.