1 of the top cryptocurrency mining stocks to buy ahead of its earnings event this week
Hut 8 Mining Corp (TSX: HUT) will report its Q1 2021 results on Thursday morning. Although its stock has traded largely on a negative note over the past two months, the stock has consistently outperformed the TSX Composite Index by a wide margin in 2021 so far.
Let’s take a closer look at why I find Hut 8 Mining stock worth buying ahead of its next profit event later this week.
Hut 8 Mining
Hut 8 Mining is a Toronto-based cryptocurrency miner with a market cap of $ 740 million. It is mainly known to be one of the oldest and largest in the world Bitcoin minors. This nearly 10-year-old cryptocurrency mining company went public in October 2012.
In 2020, Hut 8 Mining mined nearly 2,798 Bitcoin – significantly less than the 8,618 Bitcoin it mined the year before. The lower number of Bitcoins mined during the year was the main reason its total revenue fell more than 50% last year to $ 40.7 million. Several factors like a drop in the price of Bitcoin in early 2020 and the Bitcoin halving event around May 2020 – where the overall reward was halved – affected Hut 8 Mining’s overall revenue for the year. last. Nonetheless, its revenue growth trend improved in the fourth quarter, as it more than doubled year over year (year over year) to $ 13 million.
Expectations for 2021
Bay Street analysts expect Hut 8 Mining’s revenue to grow nearly 370% year-on-year this year to $ 191 million. This significant increase in total revenue should help the company report an almost 317% year-over-year increase in profit for the year. Soaring Bitcoin prices and improving Hut 8’s cryptocurrency mining infrastructure could be the main reason for analysts’ optimism.
These estimates suggest that the company’s total first-quarter revenue could reach around $ 23 million, significantly more than $ 13 million in the previous quarter.
Is his stock worth buying?
The Canadian cryptocurrency mining company recently announced its purchase of NVIDIACMPs (crypto-mining processors) worth US $ 30 million. Hut 8 plans to use these NVIDIA CMPs to operate Ethereum, alternative blockchain networks, and expand its mining activities.
Hut 8 Mining shares are currently trading at $ 6.19 per share, with gains of around 68% year-to-date. By comparison, the TSX The composite benchmark has so far risen around 12% in 2021. The company’s shares have lost nearly 37% in the past 25 days as Bitcoin prices have corrected sharply over the course of this period. However, Bitcoin prices may soon start to hit new highs with its increasing acceptability across the globe.
While I find Hut 8 stock risky for conservative investors, other investors with a medium to high risk appetite might buy its stock near current levels to hold it for the long term. Its stock may carry high risk due to its exposure to the extremely volatile cryptocurrency market, but it also has the potential to generate exceptional long-term returns.
Take away idea
Trading cryptocurrencies like Bitcoin and Ethereum with high leverage may not be a good idea as their high volatility is enough to wipe out your entire investment account in a matter of days. This is why investing in cryptocurrency mining stocks like Hut 8 might be a safer option for investors who want to benefit from the rise in crypto prices.
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Silly contributor Jitendra Parashar has no position in any of the stocks mentioned.
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