Sign InMARA Stock Potential Undervaluation & Oversold Conditions Amidst Bitcoin Volatility
Summary
Marathon Digital Holdings, Inc. (MARA) is a small-cap stock in the NASDAQ that primarily focuses on Bitcoin, but its negative earnings per share and projected negative earnings outlook should be considered when assessing the stock's future prospects, and while there is potential for price appreciation due to oversold conditions and the company's discounted cash flow, investors should be cautious of the ongoing market volatility and negative EPS. (Analysis date: October 2, 2023)
Fundamental Analysis
Marathon Digital Holdings, Inc. (MARA) is part of NASDAQ and their business primarily revolves around Bitcoin, making them responsive to the volatility associated with cryptocurrencies. Marathon Digital's market cap sits at about $1.49 billion, which designates it as a small-cap stock.
The company's EPS is reported at -4.3 USD, indicating the company is not currently profitable. Moreover, having a negative Price to Earnings (PE) ratio of -1.98 implies that investors are projecting a negative earnings outlook for the company. This must be taken into account when assessing the stock's future prospects.
Regarding analyst ratings, the stock receives a Buy consensus, with two analysts recommending Buy and two recommending Hold. Based on analyst targets, the stock has a high target of $66 and a low target of $12, with a median of $24. This reflects a potential growth compared to its last closing price of $8.5.
Recently published news regarding the company indicates a bullish outlook for Bitcoin and potential for explosive growth due to short-squeeze circumstances. However, a more concrete determination of stock performance will be visible after the company's upcoming earnings announcement on 11/06/2023.
Technical Analysis
The stock's RSI14 is reported at 25, indicating the stock is in oversold territory. This could signal a potential buying opportunity as the stock could be undervalued. However, considering the price movement, the 50-day Moving Average ($12.53) and 200-day Moving Average ($9.76) are both above the last close price of $8.5, indicating a bearish sentiment.
On the other hand, the MACD (3-month) sits at -1.09, suggesting a bearish market trend. Also, the stock has support at $8.25 and resistance at $9.79, signifying its current trading range.
Based on the Average True Range (ATR), the stock displays high price volatility. This, coupled with the high trading volume (41.73 million compared to an average volume of 30.83 million), signifies a considerable amount of trader interest.
Outlook
For the next trading day (October 2, 2023), the stock might potentially rebound from its oversold condition. It could face resistance at $9.79 and support at $8.25 within the trading range. Given the discounted cash flow (DCF) of $9.44, it seems like the stock is slightly undervalued at its current price.
Forecasting the performance for the upcoming week is challenging due to the high volatility. However, given the current technical signals and the upcoming earnings announcement, it could experience noticeable price swings.
Evaluation
Considering both fundamental and technical aspects, MARA stock is categorized as a Hold. There is potential for price appreciation considering the discounted cash flow and oversold conditions, but investors should also bear in mind the company's negative earnings per share and ongoing market volatility due to its correlation with Bitcoin movements. The imminent earnings announcement will also provide further clarity about the company's financial situation. As such, it is recommended that potential investors closely watch the stock's performance and news updates before deciding to buy.
