Marathon Digital Ramps Up Mining Capacity - Is A Turnaround in the Making?
Portfolio Pulse from Anusuya Lahiri
Marathon Digital Holdings Inc (MARA) reported a first-quarter miss on adjusted EBITDA and revenue, leading B. Riley Securities and Needham analysts to maintain their neutral stance but with adjusted expectations. The company's underperformance was attributed to elevated power and operating costs, and outages at Ellendale. Despite this, MARA plans to increase its mining capacity and expects improved costs as it becomes more vertically integrated. The stock saw a significant gain over the last 12 months but traded lower recently. Exposure to MARA can also be gained through Global X Blockchain ETF (BKCH) and IShares Trust IShares Blockchain And Tech ETF (IBLC).
May 10, 2024 | 5:42 pm
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NEUTRAL IMPACT
Global X Blockchain ETF (BKCH), which offers exposure to MARA, may see indirect impact from Marathon Digital's performance and analysts' outlook.
As BKCH provides exposure to MARA, the ETF could be indirectly affected by MARA's performance and the analysts' neutral outlook. However, the diversified nature of ETFs may mitigate the direct impact on BKCH's performance.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEUTRAL IMPACT
IShares Trust IShares Blockchain And Tech ETF (IBLC), with exposure to MARA, might be indirectly influenced by Marathon Digital's recent performance and future outlook.
Given IBLC's exposure to MARA, the ETF could face indirect impacts from Marathon Digital's Q1 miss and the subsequent analyst outlook. The effect on IBLC may be moderated due to its diversified investment approach.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Marathon Digital's Q1 miss and analysts' adjusted expectations suggest a cautious outlook, despite plans to increase mining capacity and improve costs.
The Q1 miss on both revenue and adjusted EBITDA, combined with the analysts' neutral stance and reduced price target, indicates potential short-term pressure on MARA's stock price. However, the company's plans to increase mining capacity and improve costs could provide some positive momentum in the longer term.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100