On Wednesday, HIVE Blockchain Technologies Ltd. (NASDAQ:HIVE) received a reiterated Neutral rating and a $3.50 price target from H.C. Wainwright. The company's third fiscal quarter results, which ended in December, were reportedly bolstered by increased production and a rise in Bitcoin prices, leading to better-than-expected top-line results and a return to positive adjusted EBITDA.
HIVE's average direct production costs have stabilized at approximately $22,600 per Bitcoin, excluding sales, general, and administrative expenses. These costs are comparatively high due to the company's above-average power costs and a less efficient fleet of ASICs. However, HIVE is in the process of upgrading its equipment with the acquisition of more efficient S21 and S19k Pro miners. The company aims to achieve 25 joules per terahash (J/TH) in efficiency once all S21 miners are installed, an improvement from the current fleet efficiency of around 30 J/TH.
The firm's management has set hash rate targets that have varied over time. According to a January 8 press release, HIVE aimed to reach a hash rate of 4.8 exahashes per second (EH/s) by the end of January and 5.6 EH/s by June 2024, after the installation of 7,000 S21 miners. By the end of 2024, the company expects to achieve a hash rate of 8 EH/s, as noted in a release dated December 21, 2023. This is an increase from the 3.85 EH/s reported at the end of January.
HIVE's high-performance computing (HPC) business was generating an annualized run-rate revenue of $5 million as of December 31, 2023. The company is targeting approximately $90 million in annualized revenues by the end of the 2024 calendar year. Despite these projections, H.C. Wainwright expressed a lack of confidence in HIVE's ability to significantly scale its operations to meet the targets for its Bitcoin mining and HPC business within the 2024 calendar year.
InvestingPro Insights
In light of HIVE Blockchain Technologies Ltd.'s (NASDAQ:HIVE) recent performance and targets, InvestingPro data provides a deeper look into the company's financial health and market position. As of the last twelve months leading up to Q2 2024, HIVE has a market capitalization of $342.54 million, reflecting the market's current valuation of the company. Despite the positive momentum with a significant return over the last week of 16.4%, HIVE's revenue growth has seen a downturn, with a -59.01% change year-over-year. This aligns with H.C. Wainwright's cautious stance on the company's ambitious expansion plans.
The company's P/E ratio stands at -7.46, which has adjusted slightly to -8.19 in the last twelve months as of Q2 2024, indicating that the company is not currently profitable. This is further supported by an operating income margin of -67.1%, which suggests challenges in managing operational costs relative to revenue. One of the InvestingPro Tips highlights that HIVE operates with a moderate level of debt, which could be a factor in the company's financial maneuverability as it works towards scaling operations and upgrading its mining equipment.
Another InvestingPro Tip worth noting is that while HIVE does not pay a dividend, it has demonstrated a strong return over the last three months of 27.02%. This may be of interest to investors looking for growth potential rather than immediate income. For those interested in a comprehensive analysis of HIVE, there are additional InvestingPro Tips available, which can be accessed with a subscription. Readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking further insights that could prove valuable in making informed investment decisions.
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