TLDR:
- Riot Platforms stock has risen 594% over five years despite falling 29% in the last quarter
- The company is transitioning from pure-play bitcoin mining to AI and high-performance computing sectors
- Analysts maintain a “Strong Buy” consensus with price targets suggesting over 100% upside potential
- Q1 FY2025 earnings will be released May 1, with expected revenue of $159.62 million (101% year-over-year increase)
- Activist investors D.E. Shaw and Starboard Value have taken stakes in the company, leading to board reshuffling
Riot Platforms (RIOT) shares have delivered extraordinary returns for long-term investors, with a massive 594% price increase over the past five years. This translates to a compound annual growth rate (CAGR) of 47% for shareholders who held their positions during this period.
The stock recently jumped 24% in a single week, adding $518 million to its market capitalization. This latest surge comes despite the stock falling 29% during the most recent quarter.
The company’s stock performance stands in stark contrast to the broader market. While RIOT shares are down 30% for the year, the overall market has gained 9.0% during the same period.
Riot Platforms reached an important milestone during the five-year growth period by transitioning from operating at a loss to achieving profitability. This shift likely served as an inflection point that helped justify the strong share price gains.
The bitcoin mining company is now strategically expanding beyond its core business. Riot is actively pursuing deals with artificial intelligence and high-performance computing companies to lease its mining facilities in Corsicana and Rockdale.
Strategic Investments and Board Changes
Several major investors have taken notice of Riot’s potential. Activist investor D.E. Shaw recently took an undisclosed stake in the company, while hedge fund Starboard Value acquired a position last year.
Following these strategic investments, Riot has undergone a board reshuffling. The company also announced the completion of its Corsicana facility, a development that investors had been eagerly awaiting.
These moves suggest that major financial players see untapped value in Riot’s business model and assets.
The company is scheduled to release its first-quarter fiscal 2025 results after market close on May 1. Wall Street expects Riot to post an adjusted loss of $0.33 per share, which is lower than the $0.82 profit per share recorded in the same period last year.
Revenue projections look much more promising. Analysts forecast Q1 revenue of $159.62 million, representing a massive 101% jump compared to the first quarter of fiscal 2024.
Piper Sandler analyst Patrick Moley remains bullish on the stock despite lowering his price target. Moley reduced his target by 22%, from $23 to $18, but this still represents a potential upside of 142.6% from current levels.
His revised price target is based on a valuation of 7 times Riot’s estimated fiscal 2026 revenue.
The upcoming earnings call is expected to provide clarity on several key factors. Investors will be looking for information about the Corsicana facility feasibility study, potential AI and computing partnerships, hashrate guidance, and Riot’s bitcoin treasury strategy.
Wall Street sentiment toward the stock remains overwhelmingly positive. On TipRanks, RIOT commands a “Strong Buy” consensus rating based on 10 unanimous Buy ratings from analysts.
The average price target among analysts sits at $16.75, suggesting a potential upside of 125.7% from current price levels.
Despite the optimistic analyst outlook, RIOT stock has lost 27.3% so far this year, underperforming compared to both the broader market and bitcoin prices.
The stock’s recent performance, including the 24% surge last week, may indicate that market sentiment is starting to align with analysts’ positive outlook.
Riot’s upcoming earnings report will be closely watched for signs that the company can execute on its strategic shift toward AI and high-performance computing while maintaining its bitcoin mining operations.
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