Bitcoin miner Hut 8 receives 'buy' rating and new price target from Benchmark

Benchmark has initiated coverage of bitcoin miner Hut 8, giving the company a "buy" rating and a price target of $12.

In its evaluation, Benchmark factored in the company's "diversified business model" following the completion of its merger with U.S. Bitcoin Corporation. This includes multiple new revenue streams from self-mining, managed services, hosting, high-performance computing and artificial intelligence.

Hut 8's bitcoin holdings

The investment banking firm also noted the market value of the company’s bitcoin holdings. "Hut 8 as of March 31 ranked second among listed miners in terms of bitcoin holdings with 9,102 bitcoins held in reserve. Hut 8 trades at a discount to its bitcoin mining peers that we expect to shrink as the company executes on its self-mining expansion plans," the Benchmark analysis added.

The Benchmark research note added that Hut 8's bitcoin holdings provide it with a sizeable liquidity cushion and the ability to capture upside during bitcoin price rallies.

"The company’s bitcoin holdings are valued at around $592 million, which is equal to approximately 82% of its market capitalization," the analysis noted.

Merger with U.S. Bitcoin Corporation

Hut 8 and U.S. Bitcoin Corporation announced that they had officially joined forces in November 2023. The new company, based in the U.S., is officially called Hut 8 Corporation.

As of March 31, the company had around 884 MW of power capacity under management across 11 sites and featured a total hash rate of 25.5 EH/s and a 250 MW hosting business, and a managed services operation. HUT also operates a high-performance computing business with five data centers across Canada.

Hut 8 Corporation shares are Nasdaq listed and Friday's price at close of trade was $8.05, up 2.16% in the day.