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2021-10-21

Marathon Digital Stock: More Upside With A Breakout In Bitcoin

Summary Marathon Digital Holdings is benefiting from the strong momentum in bitcoin approaching an

Marathon Digital Stock: More Upside With A Breakout In Bitcoin

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{"i18n":{"language":"zh_CN"},"data":{"magic":2,"id":853688307,"tweetId":"853688307","gmtCreate":1634800749734,"gmtModify":1634800750054,"author":{"id":4090224668853230,"authorId":4090224668853230,"authorIdStr":"4090224668853230","name":"Laulau","avatar":"https://static.tigerbbs.com/c71a1a61f1c30d965eb400d29b5e0faa","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":12,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body>Ok </body></html>","htmlText":"<html><head></head><body>Ok </body></html>","text":"Ok","highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/853688307","repostId":1114856613,"repostType":4,"repost":{"id":"1114856613","pubTimestamp":1634799659,"share":"https://www.laohu8.com/m/news/1114856613?lang=&edition=full","pubTime":"2021-10-21 15:00","market":"us","language":"en","title":"Marathon Digital Stock: More Upside With A Breakout In Bitcoin","url":"https://stock-news.laohu8.com/highlight/detail?id=1114856613","media":"Seeking Alpha","summary":"Summary\n\nMarathon Digital Holdings is benefiting from the strong momentum in bitcoin approaching an ","content":"Summary\n<ul>\n <li>Marathon Digital Holdings is benefiting from the strong momentum in bitcoin approaching an all-time high.</li>\n <li>The company has reported strong bitcoin mining production growth which is expected to accelerate as it increases capacity.</li>\n <li>We are bullish on the stock which we believe can continue to outperform the price of bitcoin.</li>\n</ul>\n<img src=\"https://static.tigerbbs.com/9d7bf6e4e906ea0634d29e16cfcb23d9\" tg-width=\"1536\" tg-height=\"1024\" referrerpolicy=\"no-referrer\">24K-Production/iStock Editorial via Getty Images\nMarathon Digital Holdings Inc(NASDAQ:MARA)&nbsp;has achieved juggernaut status as the leading Bitcoin mining stock benefiting from the ongoing crypto bull market. Shares are up over 360% this year and there is a strong case for more upside. The key is to put aside any outdated misconceptions about the industry and recognize that the company is generating massive revenue growth with earnings set to ramp up. Indeed, with the price of Bitcoin climbing back above $60k, MARA's own all-time high of $58 set back in early April is again within reach. In many ways, the outlook for Bitcoin mining and the broader crypto space has never been more positive. We are bullish on MARA expect shares to continue outperforming through 2022, gaining momentum as it captures a higher valuation premium.\n<img src=\"https://static.tigerbbs.com/7ae131d9493e92d6449acd5fe4aae4a0\" tg-width=\"640\" tg-height=\"245\" referrerpolicy=\"no-referrer\">Seeking Alpha\nMARA Strong Bitcoin Mining Growth\nThe company provided a production update in early October with the headline of mining 1,252.4 Bitcoins in Q3, nearly double the 664.3 total mined in Q2. While the price of Bitcoin averaged around $42k in the quarter, the current market price of $60k implies a quarterly revenue run rate of $75 million that is expected to accelerate going forward as the company continues to expand its capacity. Marathon now holds 7,035 Bitcoin on its balance sheet with a value of over $422 million in addition to a separate cash position of $33 million.\n<img src=\"https://static.tigerbbs.com/d6280bcec6f8519e422b36b50f1ad702\" tg-width=\"640\" tg-height=\"292\" referrerpolicy=\"no-referrer\">source: company IR\nFrom a reported 29,960 mining machines at the end of September and 2.7 EH/s in hash rate, the plan is to deploy a total of 133,000 miners by mid-2022 meaning the company's mining capacity will be 5x larger than its current level. Management noted some recent logistical issues have impacted shipping times to the company's facility in Hardin, Montana but reaffirmed its schedule of installations through next year.\n<img src=\"https://static.tigerbbs.com/a3dda9d658a8671363d36682b39de88f\" tg-width=\"640\" tg-height=\"396\" referrerpolicy=\"no-referrer\">source: company IR\nAssuming the entire fleet of miners was fully deployed right now, it is estimated Marathon would control around 8.4% of the global Bitcoin network based on the current network difficulty of around 158 EH/s compared to the current 2% as per the chart above. At 8.4%, Marathon could theoretically be mining close to 2,275 Bitcoins per month representing a market value of $137 million or $1.6 billion as an annualized run rate. These are the types of figures that help justify the company's current market cap near $5 billion.\n<img src=\"https://static.tigerbbs.com/f1a148065410a5daa0467a904f95e710\" tg-width=\"640\" tg-height=\"344\" referrerpolicy=\"no-referrer\">source: company IR\nAccording to consensus estimates, the market is forecasting MARA 2021 revenue to reach $225 million along with positive EPS of $0.94 this year. Again, the real optimism is for next year as capacity and production ramps ups through the second half of 2022 with an estimate for revenue to approach $790 million and EPS of $4.16. Even considering the breathtaking rally in shares of MARA this year, we believe the current valuation metrics including a 1-year forward price to sales multiple of 6.2x and 12x P/E ratio on the 2022 consensus EPS are attractive. The reality is that there are few stocks in any sector generating this type of growth with a bullish outlook for Bitcoin.\n<img src=\"https://static.tigerbbs.com/0e6ee8bb568d2b57f5f9bee2201acb45\" tg-width=\"640\" tg-height=\"272\" referrerpolicy=\"no-referrer\">Seeking Alpha\nBullish on Bitcoin\nCompared to the \"crypto winter\" during the summer months when the price of Bitcoin briefly traded under $30k in what was a painful 50% correction, the sentiment has decisively turned positive. Our sense is that many of the long-term drivers for Bitcoin including the growing recognition at the institutional level of cryptocurrencies as an alternative asset class along with ongoing adoption for payments continue to represent fundamental tailwinds that can drive the price of Bitcoin higher.\n<img src=\"https://static.tigerbbs.com/b24b52a2b30b155f858d4c78704db52c\" tg-width=\"640\" tg-height=\"328\" referrerpolicy=\"no-referrer\">source: company IR\nFrom a technical standpoint, the selloff likely helped to consolidate the multi-year gains in Bitcoin following a particularly strong 2020 which now establishes a stronger base of support for the next leg higher. While Bitcoin is still a few percentage points below its April all-time high of $65k, there are some good reasons to believe a breakout is on tap.\nFirst, reports are that a&nbsp;Bitcoin ETF&nbsp;linked to traded Bitcoin futures is set to begin trading this week through the ProShares Bitcoin Strategy ETF(NYSEARCA:BITO). The expectation is for many other Bitcoin exchange-traded products to be approved still this year which can be interpreted as an apparent stamp of approval by regulators that cryptocurrencies are here to stay. The potential that the new instruments funnel more capital into the space can directly drive the price of Bitcoin further.\nWe have a year-ahead price target of $100,000 for Bitcoin (BTC-USD) which is about 60% higher than the current level. Our base case is that even with some expected volatility and pullbacks on profit-taking, the trend higher can be accelerated through Q4 with a repeat of the action from 2020. While the run in Bitcoin likely had some doubters in Q1 this year, its ability to brush aside the headwinds between concerns over environmental impacts and global regulation only helps reinforce the long-term outlook.\n<img src=\"https://static.tigerbbs.com/4fba484e07c8f9f005525cba220d0c34\" tg-width=\"640\" tg-height=\"267\" referrerpolicy=\"no-referrer\">finviz.com\nThe fund manager ARK Invest has published research suggesting a growing allocation by institutional investors towards Bitcoin could impact the price between $200,000 and $500,000 long term. The group believes just a 1% allocation towards Bitcoin by all groups of institutional investors would incrementally add $100,000 to the price of Bitcoin. We expect the wider availability of Bitcoin and crypto investment products to gradually become a staple of diversified portfolios for all investors. In the near term, in our view, the $100k price level will eventually act as a magnet for traders to target through momentum based on the psychological importance of the round number.\n<img src=\"https://static.tigerbbs.com/a9f6776e72cad8d908f9b9c270810e92\" tg-width=\"640\" tg-height=\"338\" referrerpolicy=\"no-referrer\">source: Ark Invest\nMARA Stock Forecast\nAs it relates to MARA, the higher the price of Bitcoin directly translates into higher revenue and earnings potential. We expect Bitcoin miners to outperform the crypto price to the upside based on the concept of operating leverage. Simply put, higher revenues can correspond to an even higher impact to operating income and earnings. Marathon's advantage is both its current scale with a leg up on other miners attempting to secure production capacity through next year. The company's low cost of electricity with an estimated production cost of $5,612 per Bitcoin highlights the profitability potential. MARA's efforts at sustainability with a plan to be 100% carbon neutral by the end of 2022 is a benchmark for the entire industry.\n<img src=\"https://static.tigerbbs.com/16f2a439d461073969566bfb6372e5a1\" tg-width=\"640\" tg-height=\"338\" referrerpolicy=\"no-referrer\">source: company IR\nTo forecast how many Bitcoins and revenue MARA will be generating by this time next year, we need to consider not only the price of Bitcoin but also the Bitcoin network difficulty. It's understood that as more mining machines go online, the network hash rate will climb and thereby dilute each existing miners' share of the Bitcoin mining potential. Over the course of a year, 52,560 Bitcoin blocks are awarded by the network with each block representing 6.25 BTC. The 328,500 newly minted Bitcoin mined over the course of a year is the market potential MARA is attempting to capture.\nWe mentioned the company's guidance for 13.3 EH/s represents about 8.4% of the current global hash rate. In reality, by the time the full fleet of mining machines is deployed, it's likely the network difficulty will be above 200 EH/s meaning the 8.4% share will be reduced down towards 6.7% or lower. There is a great deal of uncertainty as to how this rate will progress although the general consensus is that the network difficultly will trend higher. From the chart below, we can observe a large drop in the global hash rate in mid-2021 which coincided with Chinese miners going offline as mining was banned in the country. The other dynamic at play is that some of the oldest mining machines online currently go past their lifecycle and need to be replaced generating a regular turnover.\n<img src=\"https://static.tigerbbs.com/22dda2e73253a8137117a0f57124b926\" tg-width=\"635\" tg-height=\"417\" referrerpolicy=\"no-referrer\">Data by YCharts\nWe are extrapolating how much Marathon's revenue run rate could be by the second half of next year when it fully deploys all announced mining machine purchases. For example, with a hash rate capacity of 13.3 EH/s by mid-2022, assuming a network difficultly level of 215 EH/s at that point, MARA would control 6.2% of the global hash rate and be able to mine approximately 1,693 Bitcoins in a single month. At the current market price of $60k, the monthly revenue would approach $102 million which is annualized to $1.219 billion. By this measure, we can state that shares of MARA are trading at a forward price to sales multiple of 4.3x based on its expected annualized revenue run rate by next year against the current market cap for the stock at $5.2 billion.\n<img src=\"https://static.tigerbbs.com/a9a91df4ee0c4ed3b80e6e4733b6247d\" tg-width=\"640\" tg-height=\"414\" referrerpolicy=\"no-referrer\">source: author estimates\nIn our view, MARA is undervalued at its current level in the context of the Bitcoin pricing environment and growth outlook. A forward P/S multiple closer to 5x would better reflect an appropriate growth premium and the company's positive outlook in our opinion. By this measure, at a constant BTC price of $60k and an outlook for the hash rate to trend towards 215 EH/s, we believe MARA should be valued closer to $61.50 as a near-term price target.\nGoing a step further, with an outlook for Bitcoin to potentially reach $100k by next year, we see shares of MARA trending towards $100. From the table above, the Bitcoin market price of $100k at a 215 EH/s hash rate for next year implies MARA is currently trading at a forward P/S of 2.6x. The stock would need to climb at least 92% from the current level to maintain the valuation parity of 5x based on our model.\nThe Big Picture\nThe Bitcoin mining industry continues to mature with more and more investors beginning to recognize the intrinsic value the leading stocks are generating. Marathon Digital as a U.S.-based leader remains one of the most exciting companies in the segment in the middle of a transformative year. We are encouraged by the recent operating and financial results and expect the company to continue executing successfully. We rate shares of MARA as a buy with a bullish price target of $100 per share in a scenario where Bitcoin trends towards $100k.\nLonger-term, the company's scale and growing balance sheet Bitcoin position will offer it more flexibility to expand into related crypto services while adding to its mining capacity. For the upcoming quarters, the Q3 earnings report will provide an opportunity to take a look at the cost structure as production accelerates. Monitoring points include the monthly updates while it will be important for the company to remain on schedule with the mining machines deliveries and deployments.\nIt goes without saying that the main risk here continues to be the price of Bitcoin. While we are bullish, shares are of MARA will be highly sensitive to the cryptocurrency market price. A selloff in BTC under $50k would likely drive some renewed bearish sentiment and higher volatility. The regulatory landscape also remains uncertain. Efforts by some U.S. states to limit Bitcoin mining along with environmental impact concerns can generate headlines that pressure the segment lower. For 2022, we believe the market will begin to look more closely at earnings and cash flows beyond the high-level themes and momentum.","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Marathon Digital Stock: More Upside With A Breakout In Bitcoin</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMarathon Digital Stock: More Upside With A Breakout In Bitcoin\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-10-21 15:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4460632-marathon-digital-more-upside-with-breakout-in-bitcoin>Seeking Alpha</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nSummary\n\nMarathon Digital Holdings is benefiting from the strong momentum in bitcoin approaching an all-time high.\nThe company has reported strong bitcoin mining production growth which is expected to...\n\n<a href=\"https://seekingalpha.com/article/4460632-marathon-digital-more-upside-with-breakout-in-bitcoin\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"https://static.tigerbbs.com/e3cdd0b2f46028be0fdb985c3d97141c","relate_stocks":{"MARA":"Marathon Digital Holdings Inc"},"source_url":"https://seekingalpha.com/article/4460632-marathon-digital-more-upside-with-breakout-in-bitcoin","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1114856613","content_text":"Summary\n\nMarathon Digital Holdings is benefiting from the strong momentum in bitcoin approaching an all-time high.\nThe company has reported strong bitcoin mining production growth which is expected to accelerate as it increases capacity.\nWe are bullish on the stock which we believe can continue to outperform the price of bitcoin.\n\n24K-Production/iStock Editorial via Getty Images\nMarathon Digital Holdings Inc(NASDAQ:MARA) has achieved juggernaut status as the leading Bitcoin mining stock benefiting from the ongoing crypto bull market. Shares are up over 360% this year and there is a strong case for more upside. The key is to put aside any outdated misconceptions about the industry and recognize that the company is generating massive revenue growth with earnings set to ramp up. Indeed, with the price of Bitcoin climbing back above $60k, MARA's own all-time high of $58 set back in early April is again within reach. In many ways, the outlook for Bitcoin mining and the broader crypto space has never been more positive. We are bullish on MARA expect shares to continue outperforming through 2022, gaining momentum as it captures a higher valuation premium.\nSeeking Alpha\nMARA Strong Bitcoin Mining Growth\nThe company provided a production update in early October with the headline of mining 1,252.4 Bitcoins in Q3, nearly double the 664.3 total mined in Q2. While the price of Bitcoin averaged around $42k in the quarter, the current market price of $60k implies a quarterly revenue run rate of $75 million that is expected to accelerate going forward as the company continues to expand its capacity. Marathon now holds 7,035 Bitcoin on its balance sheet with a value of over $422 million in addition to a separate cash position of $33 million.\nsource: company IR\nFrom a reported 29,960 mining machines at the end of September and 2.7 EH/s in hash rate, the plan is to deploy a total of 133,000 miners by mid-2022 meaning the company's mining capacity will be 5x larger than its current level. Management noted some recent logistical issues have impacted shipping times to the company's facility in Hardin, Montana but reaffirmed its schedule of installations through next year.\nsource: company IR\nAssuming the entire fleet of miners was fully deployed right now, it is estimated Marathon would control around 8.4% of the global Bitcoin network based on the current network difficulty of around 158 EH/s compared to the current 2% as per the chart above. At 8.4%, Marathon could theoretically be mining close to 2,275 Bitcoins per month representing a market value of $137 million or $1.6 billion as an annualized run rate. These are the types of figures that help justify the company's current market cap near $5 billion.\nsource: company IR\nAccording to consensus estimates, the market is forecasting MARA 2021 revenue to reach $225 million along with positive EPS of $0.94 this year. Again, the real optimism is for next year as capacity and production ramps ups through the second half of 2022 with an estimate for revenue to approach $790 million and EPS of $4.16. Even considering the breathtaking rally in shares of MARA this year, we believe the current valuation metrics including a 1-year forward price to sales multiple of 6.2x and 12x P/E ratio on the 2022 consensus EPS are attractive. The reality is that there are few stocks in any sector generating this type of growth with a bullish outlook for Bitcoin.\nSeeking Alpha\nBullish on Bitcoin\nCompared to the \"crypto winter\" during the summer months when the price of Bitcoin briefly traded under $30k in what was a painful 50% correction, the sentiment has decisively turned positive. Our sense is that many of the long-term drivers for Bitcoin including the growing recognition at the institutional level of cryptocurrencies as an alternative asset class along with ongoing adoption for payments continue to represent fundamental tailwinds that can drive the price of Bitcoin higher.\nsource: company IR\nFrom a technical standpoint, the selloff likely helped to consolidate the multi-year gains in Bitcoin following a particularly strong 2020 which now establishes a stronger base of support for the next leg higher. While Bitcoin is still a few percentage points below its April all-time high of $65k, there are some good reasons to believe a breakout is on tap.\nFirst, reports are that a Bitcoin ETF linked to traded Bitcoin futures is set to begin trading this week through the ProShares Bitcoin Strategy ETF(NYSEARCA:BITO). The expectation is for many other Bitcoin exchange-traded products to be approved still this year which can be interpreted as an apparent stamp of approval by regulators that cryptocurrencies are here to stay. The potential that the new instruments funnel more capital into the space can directly drive the price of Bitcoin further.\nWe have a year-ahead price target of $100,000 for Bitcoin (BTC-USD) which is about 60% higher than the current level. Our base case is that even with some expected volatility and pullbacks on profit-taking, the trend higher can be accelerated through Q4 with a repeat of the action from 2020. While the run in Bitcoin likely had some doubters in Q1 this year, its ability to brush aside the headwinds between concerns over environmental impacts and global regulation only helps reinforce the long-term outlook.\nfinviz.com\nThe fund manager ARK Invest has published research suggesting a growing allocation by institutional investors towards Bitcoin could impact the price between $200,000 and $500,000 long term. The group believes just a 1% allocation towards Bitcoin by all groups of institutional investors would incrementally add $100,000 to the price of Bitcoin. We expect the wider availability of Bitcoin and crypto investment products to gradually become a staple of diversified portfolios for all investors. In the near term, in our view, the $100k price level will eventually act as a magnet for traders to target through momentum based on the psychological importance of the round number.\nsource: Ark Invest\nMARA Stock Forecast\nAs it relates to MARA, the higher the price of Bitcoin directly translates into higher revenue and earnings potential. We expect Bitcoin miners to outperform the crypto price to the upside based on the concept of operating leverage. Simply put, higher revenues can correspond to an even higher impact to operating income and earnings. Marathon's advantage is both its current scale with a leg up on other miners attempting to secure production capacity through next year. The company's low cost of electricity with an estimated production cost of $5,612 per Bitcoin highlights the profitability potential. MARA's efforts at sustainability with a plan to be 100% carbon neutral by the end of 2022 is a benchmark for the entire industry.\nsource: company IR\nTo forecast how many Bitcoins and revenue MARA will be generating by this time next year, we need to consider not only the price of Bitcoin but also the Bitcoin network difficulty. It's understood that as more mining machines go online, the network hash rate will climb and thereby dilute each existing miners' share of the Bitcoin mining potential. Over the course of a year, 52,560 Bitcoin blocks are awarded by the network with each block representing 6.25 BTC. The 328,500 newly minted Bitcoin mined over the course of a year is the market potential MARA is attempting to capture.\nWe mentioned the company's guidance for 13.3 EH/s represents about 8.4% of the current global hash rate. In reality, by the time the full fleet of mining machines is deployed, it's likely the network difficulty will be above 200 EH/s meaning the 8.4% share will be reduced down towards 6.7% or lower. There is a great deal of uncertainty as to how this rate will progress although the general consensus is that the network difficultly will trend higher. From the chart below, we can observe a large drop in the global hash rate in mid-2021 which coincided with Chinese miners going offline as mining was banned in the country. The other dynamic at play is that some of the oldest mining machines online currently go past their lifecycle and need to be replaced generating a regular turnover.\nData by YCharts\nWe are extrapolating how much Marathon's revenue run rate could be by the second half of next year when it fully deploys all announced mining machine purchases. For example, with a hash rate capacity of 13.3 EH/s by mid-2022, assuming a network difficultly level of 215 EH/s at that point, MARA would control 6.2% of the global hash rate and be able to mine approximately 1,693 Bitcoins in a single month. At the current market price of $60k, the monthly revenue would approach $102 million which is annualized to $1.219 billion. By this measure, we can state that shares of MARA are trading at a forward price to sales multiple of 4.3x based on its expected annualized revenue run rate by next year against the current market cap for the stock at $5.2 billion.\nsource: author estimates\nIn our view, MARA is undervalued at its current level in the context of the Bitcoin pricing environment and growth outlook. A forward P/S multiple closer to 5x would better reflect an appropriate growth premium and the company's positive outlook in our opinion. By this measure, at a constant BTC price of $60k and an outlook for the hash rate to trend towards 215 EH/s, we believe MARA should be valued closer to $61.50 as a near-term price target.\nGoing a step further, with an outlook for Bitcoin to potentially reach $100k by next year, we see shares of MARA trending towards $100. From the table above, the Bitcoin market price of $100k at a 215 EH/s hash rate for next year implies MARA is currently trading at a forward P/S of 2.6x. The stock would need to climb at least 92% from the current level to maintain the valuation parity of 5x based on our model.\nThe Big Picture\nThe Bitcoin mining industry continues to mature with more and more investors beginning to recognize the intrinsic value the leading stocks are generating. Marathon Digital as a U.S.-based leader remains one of the most exciting companies in the segment in the middle of a transformative year. We are encouraged by the recent operating and financial results and expect the company to continue executing successfully. We rate shares of MARA as a buy with a bullish price target of $100 per share in a scenario where Bitcoin trends towards $100k.\nLonger-term, the company's scale and growing balance sheet Bitcoin position will offer it more flexibility to expand into related crypto services while adding to its mining capacity. For the upcoming quarters, the Q3 earnings report will provide an opportunity to take a look at the cost structure as production accelerates. Monitoring points include the monthly updates while it will be important for the company to remain on schedule with the mining machines deliveries and deployments.\nIt goes without saying that the main risk here continues to be the price of Bitcoin. While we are bullish, shares are of MARA will be highly sensitive to the cryptocurrency market price. A selloff in BTC under $50k would likely drive some renewed bearish sentiment and higher volatility. The regulatory landscape also remains uncertain. Efforts by some U.S. states to limit Bitcoin mining along with environmental impact concerns can generate headlines that pressure the segment lower. For 2022, we believe the market will begin to look more closely at earnings and cash flows beyond the high-level themes and momentum.","news_type":1},"isVote":1,"tweetType":1,"viewCount":321,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"CN","currentLanguage":"CN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"upFlag":false,"length":2,"xxTargetLangEnum":"ZH_CN"},"commentList":[],"hasMoreComment":false,"orderType":2}