Analyst believes Bitfarms Stock is Underpriced due to Company’s Emphasis on AI and Energy Strategy
Mike Colonnese, an analyst at H.C. Wainwright & Co., has included Bitfarms stock in the firm’s top recommendations for the Bitcoin mining sector in 2025, highlighting notable operational enhancements and a pivot towards high-performance computing and AI infrastructure.
In a research note after Bitfarms’ Q4 2024 earnings report and conference call, Colonnese remarked that the market is “significantly undervaluing” the company’s expanded mining operations and developing AI strategy.
H.C. Wainwright has maintained its Buy rating for Bitfarms with a price target of $3.50 per share, suggesting a potential upside of over three times from its current price around $0.98.
Q4 Overview
On March 27, Bitfarms announced its Q4 2024 results, reporting revenue of $56.2 million, which represented a 25% increase quarter-over-quarter and met analyst expectations. Self-mining revenue increased to $54.6 million, fueled by rising average Bitcoin (BTC) prices and a 13% growth in deployed hashrate to 12.8 EH/s by the end of the year. Gross mining profit rose to $25.8 million, yielding a margin of 47.3%, up from 38.4% in the prior quarter.
Although Bitcoin production decreased to 654 BTC due to escalating network difficulty, the company recorded a net income of $15.2 million, or $0.03 per share, marking a significant recovery from a net loss of $36.6 million in Q3. Adjusted EBITDA nearly tripled to $14.3 million.
Bitfarms has increased its hashrate capacity to 18.6 EH/s, nearly tripling its computing power from 6.5 EH/s at the end of 2023. Additionally, fleet upgrades have enhanced overall efficiency by 45%, with hash costs averaging approximately $20–$22 per petahash, significantly lower than the current market hash prices of around $50/PH.
Despite these advancements, Bitfarms’ stock has declined by 57% since November, in contrast to a 7% decrease in the Nasdaq index during the same timeframe. Colonnese considers the company’s existing valuation of approximately $25 million per deployed EH to be substantially undervalued compared to peers, who trade closer to $85 million per EH.
Energy Assets to Fuel AI Expansion
Looking beyond Bitcoin mining, Bitfarms is establishing itself as a North American energy and computing company.
Management indicated during the call that there are currently no plans to acquire additional ASIC miners, with future growth aimed at enhancing energy infrastructure to support AI and high-performance computing (HPC) workloads.
This strategy includes a recent acquisition of Stronghold assets and the sale of its Yguazu site in Paraguay, raising the company’s U.S. energy portfolio share from 6% to 33%. Bitfarms now aspires to expand to 1.4 GW of total energy capacity by 2028, with nearly 80% situated in the United States.
Colonnese highlighted that the HPC/AI potential has yet to be reflected in current forecasts, and a possible collaboration with a hyperscaler could yield significant advantages.