- Hut 8 Mining reports a 64% year-on-year hit to revenue in its Q1.
- Craig-Hallum analyst sees downside in “HUT” to C$2.0 a share.
- Hut 8 Mining stock is now down nearly 30% versus its YTD high.
Hut 8 Mining Corp is trading down on Thursday after reporting a massive year-on-year decline in its first-quarter revenue.
Notable figures in Hut 8 Mining Q1 report
- Earned C$0.47 a share versus C$0.15 a share loss expected
- Revenue tanked a more than expected 64% to C$19 million
- Mined 475 bitcoin – down roughly 50% versus a year ago
- Increased its installed hashrate in the quarter to 2.6 EH/s
At its Ontario facility, Hut 8 Mining had to switch off roughly 8,000 machines because of a dispute with Validus Power Corp. In the press release, CEO Jamie Leverton also said:
In early 2023, we experienced a confluence of events: electrical issues at our Drumheller site caused equipment failures, fluctuating energy prices and increased network difficulty.
Versus its year-to-date high, Hut 8 Mining stock is down nearly 30% at writing.
Is Hut 8 Mining stock worth buying?
So far, only 1,000 of those machines in its Ontario facility are back online and its Alberta mine is running at just 15% of its installed hashrate.
Hut 8 Mining is currently in the process of merging with USBTC or U.S. Bitcoin Corp. According to the Chief Executive:
We have made progress on key regulatory files required to complete the transaction. We also reached an all-time operational high of 1.72 EH/s at our Medicine Hat facility.
Despite underperformance, it may not be the best of ideas to take a position in this Canadian company today considering a Craig-Hallum analyst reiterated his “hold” rating on Hut 8 Mining stock this week. His C$2.0 price target suggests another 10% downside from here.
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Over the past few weeks, investors have been pondering whether to buy into the affected Hut 8 Mining Corp, as the company’s stock has been on a steep decline. The recent decrease in stock value came after the company disclosed their Q1 revenue, revealing a significant drop over the same period the previous year.
Hut 8 is the go-to name in Bitcoin and cryptocurrency mining, with significant investments in acquiring equipment to build large-scale mining operations. Focusing on bringing in returns from crypto’s boom, the company holds the distinction as the largest publicly traded crypto-miner in North America.
The Silicon Valley upstart’s first quarter financial results have raised eyebrows, coming in far below the expectations of the majority of its investors. Despite the negative numbers, the startup’s shares had dropped only marginally during the announcement.
In the weeks following, however, the stock has experienced a steeper descent motivating serious speculation about the possibility of a buy-in, given the stock’s decreased value. This opinion, however, is divided -many analysts think it is a good buy opportunity, while others warn investors against a potential long-term downside.
Hut 8 has expressed confidence in the long-term success of its operations, noting recent investments and developments within the company have not been taken into account yet. Moreover, the company reports expectations of a recovery due to the shift away from energy-intensive practices that have historically been part of their business model.
Still, investors remain wary, as the Q1 report gave little assurance for Hut 8’s future outlook and ability to move through the technical challenges. In the meantime, investors and analysts will be keeping an eye on developments to determine if Hut 8 can surge ahead, eventually recovering its stock back to previous levels.
