B.Riley sets Hut 8 Mining stock Buy rating, $25 target

On Wednesday, B.Riley initiated coverage on Hut 8 Mining Corp. (NASDAQ:HUT), assigning the stock a Buy rating and setting a price target of $25.00. The stock, currently trading at $16.50 with a market capitalization of $1.72 billion, has shown strong momentum with a 30% gain in the past week. InvestingPro data reveals 12 additional key insights about HUT’s valuation and growth prospects. The firm’s analyst highlighted Hut 8’s diversified business model, which spans across Canada and the U.S., as a key strength. Hut 8 operates through three main business lines: Power, Digital Infrastructure, and Compute. The company maintains a healthy gross profit margin of 42%, demonstrating operational efficiency across its segments.

The Power segment includes power generation and managed services, while the Digital Infrastructure division focuses on colocation businesses for CPUs and ASICs. The Compute segment involves BTC mining, GPU-as-a-service, and data center cloud services. B.Riley expects Hut 8’s growth initiatives over the next 12 months to support this diversified approach, which they believe enables the company to take advantage of the colocation business’s growth potential and reduce earnings volatility.

According to B.Riley, Hut 8’s business model is expected to yield greater economies of scale and scope in the long term. The analyst also noted that Hut 8 is not just a data center company but also a proficient operator of power assets, thanks to the management team’s background. With a substantial growth pipeline and projected revenue growth of 42% for FY2025, the analyst stated that Hut 8 is well-positioned to unlock multiple future growth opportunities. For a deeper understanding of HUT’s growth potential and risks, access the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Hut 8 Corp reported a significant financial downturn for the first quarter of 2025, with revenue declining sharply to $21.8 million from $51.7 million the previous year, alongside a net loss of $134.3 million. Despite these financial challenges, the company has made strategic moves, such as completing a fleet upgrade and launching American Bitcoin, which have led to a 7.11% increase in its stock price. The company is focusing on strategic infrastructure developments at the Vega Data Center and expansion plans in data centers, which are part of its broader strategy to enhance operational efficiency. Hut 8 is also exploring the potential for public listing and targeting a 50 exahash capacity for American Bitcoin. Analysts have shown interest in the company’s long-term strategic direction, particularly its Bitcoin accumulation strategy and the rationale behind the American Bitcoin carve-out. The company’s CEO emphasized the focus on growth and infrastructure development as part of their evolution as an integrated energy infrastructure platform. These developments reflect Hut 8’s efforts to navigate financial challenges while positioning itself for future growth.

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