Source: Rafapress / Shutterstock.com
Digital Marathon (Nasdaq:Mara) The stock has a bearish outlook, with the stock actually declining over the year. This comes as Bitcoin (Bitcoin-dollar) is hovering near all-time highs. One might wonder why this is. After all, MARA's stock price is directly linked to the value of Bitcoin.
Investors are taking into account the upcoming Bitcoin halving and its impact on prices. A 50% drop in revenue is significant for a company like Marathon Digital unless Bitcoin continues to rise. For Bitcoin believers, MARA stock could be a buy.
Strong financials And Mara Stock
In its recent quarter earnings report, Marathon certainly scored a victory given its outstanding results.
The company generated more than $150 in net income on top of $156 million in revenue, while maintaining 15,126 Bitcoin on its balance sheet at the end of the year.
Bitcoin alone is worth over $1 billion at the time of writing, supporting Marathon Digital's $6 billion valuation.
However, the other $5 billion in the company's valuation is tied to future cash flows that remain uncertain, especially if an upcoming halving event cuts those numbers in half.
In its earnings report, Marathon Digital announced a plan to boost margins and double their rate by 2025. This strategic plan may require using some of the company's Bitcoin reserves, but it also means that the company will not need to dilute shareholders or take over. religion.
So the question about this company's future financial picture is: Where do you see the price of Bitcoin five years from now?
Bitcoin mining firmware released
As a major Bitcoin miner, Marathon unveiled MARAFW and MARA UCB 2100, two advanced firmware and control panels that improve the performance and efficiency of Bitcoin mining rigs.
After a year of development and testing, Marathon is implementing MARAFW across more than 200,000 of its mining rigs.
Following successful initial rollouts, Marathon has expanded MARAFW and the MARA UCB 2100 to the broader Bitcoin mining community. The company has sold these products to many enterprise customers and now offers them to all interested miners.
MARAFW, a custom firmware, optimizes Bitcoin miners' chipset settings to improve performance, efficiency, and stability.
It features hash rate optimization, auto-tuning, overclocking, overclocking, and intelligent thermal protection. MARAFW is compatible with most stock control panels and Marathon's MARA UCB 2100.
These improvements are certainly noteworthy, and there is a huge amount of innovation happening behind the scenes that the market doesn't seem to be taking into account at the moment.
This stock looks like a buy
Marathon Digital's path forward remains uncertain. There is a lot of short interest around this stock, with a lot of uncertainty associated with the company's abilities to generate future cash flow.
However, given the balance of risks, I think MARA stock looks like a buy at current levels, for those who believe Bitcoin will continue to surpass $100,000 per coin by the end of the year.
It is my opinion that MARA stock could actually be a better way to profit from Bitcoin's potential rise than Bitcoin itself. Its leveraged nature essentially ensures this.
Of course, it's a risky bet. But those in the cryptocurrency sector are not afraid of risks, especially given the momentum in this field at the moment.
On the date of publication, Chris McDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are the author's own and subject to InvestorPlace.com's publishing guidelines.
