Let’s Talk About Riot Blockchain Stock (NASDAQ: RIOT)
The global blockchain market is expected to grow at a compound annual growth rate of 56.3% over the next seven years to reach $163.83 billion by 2029 from $7.18 billion in 2022, according to a report by Fortune Business Insights. The market was valued at $4.67 billion last year. Riot Blockchain Inc. (NASDAQ:RIOT), which has lost 81.5% over the past year, is a stock that could benefit from this opportunity, which will be driven primarily by blockchain technology’s ability to provide open access to data.
What does Riot Blockchain do?
Headquartered in Colorado, Riot Blockchain offers industrial-scale digital infrastructure. The company is also engaged in Bitcoin mining, with operations and a mining data center located in central Texas. In addition, it has electrical switchgear engineering and fabrication in Denver, Colorado.
Recently, RIOT reported financial results for the second quarter of 2022. Let’s find out how the company performed during the quarter.
A snapshot of Riot Blockchain’s second quarter results
Revenue increased 112% year-over-year to $72.9 million, driven by a 47% increase in mining revenue to $46.2 million. Data center hosting services revenue was $9.8 million, and engineering segment revenue was $16.9 million.
The amount of Bitcoin produced more than doubled to 1,395, and adjusted EBITDA came in at a negative $65.2 million, compared to the $2.4 million reported in the year-ago quarter.
Riot Blockchain posted a loss of $2.81 per share during the quarter compared to a profit of 22 cents per share in the second quarter last year. A $349.1 million goodwill write-down and a $99.8 million accounting write-down on Bitcoin pushed the company into the red.
Is Riot Blockchain a buy?
Analysts seem to be very bullish on Riot Blockchain. On TipRanks, RIOT stock has a strong buy consensus rating based on six unanimous buys. RIOT’s average price forecast of $14.83 implies 115.2% upside potential to the current price level.
Following the release of RIOT’s quarterly results, Cantor Fitzgerald analyst Josh Siegler said, “Riot is a best-in-class pick in the cryptocurrency mining industry due to its strong balance sheet and vertically integrated positioning.” The analyst has maintained a Buy rating on RIOT stock, but lowered the price target to $12 from $42 (74.2% upside potential).
Last month, Lucas Pipes of B.Riley Financial (NASDAQ: RILY) added Riot Blockchain to the financial services provider’s “25 for 2022” shortlist. The analyst is of the opinion that the company “represents the best combination of growth and value.”
Contrary to analysts, hedge funds and private investors have a neutral view of RIOT stock. The outlook appears to be in line with a score of four out of 10 on TipRanks’ Smart Score Rating system.
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