Analyst upgrades Hut 8 mining stock to ‘Buy’, raises price target

Analysts at H.C. Wainwright & Co. believe that Hut 8 Mining’s stock is now valuable due to some of their strategic advances. 

Hut 8 Mining Corp. received a double upgrade in its rating from “Sell” to “Buy” by analysts at H.C. Wainwright following the release of its second-quarter financial results. The price target was also lifted from $7.50 to $13.50 per share, implying an upside potential of around 23% from current levels, driven by the company’s recent strategic developments.

Hut 8’s positive developments

The upgrade is driven by several positive catalysts, including Hut 8’s success in reducing electricity costs, now at a competitive $0.032/kWh, following the completion of its restructuring program and the energization of a new 63 MW facility in Texas. 

Additionally, the company’s strong liquidity position — $722 million in total, including 9,102 Bitcoin (BTC) — positions it well to capitalize on market opportunities by acquiring and deploying the latest mining equipment.

Moreover, the probability of Hut 8 securing a high-performance computing or artificial intelligence customer has increased after a $150 million investment from Coatue, bolstering the company’s potential for multi-year, high-margin contracts.

Stock declines

Despite a 50% decline in Hut 8’s stock price over the past month, analysts view the current valuation as an attractive entry point for investors, particularly given the company’s potential to nearly triple its operating hash rate by 2025.

As Hut 8 continues to optimize its operations and explore new market opportunities, the recent appointment of Sean Glennan as CFO, effective August 21, is expected to further strengthen the company’s financial strategy.

Hut 8’s Q2 2024 revenue declined 32% quarter-over-quarter to $35.2 million, with a GAAP EPS loss of $0.78 per share.