Sign InMarathon Digital Holdings, Inc. Shows Potential for Growth Despite Volatility
Summary
Marathon Digital Holdings, Inc. (MARA) experienced a 7.98% increase in its stock price on July 10, 2023, indicating potential for growth, but the high RSI suggests a slowdown in its upward movement, warranting a cautious approach for investors.
Technical Analysis
On July 10, 2023, Marathon Digital Holdings, Inc. (NASDAQ: MARA), closed at $16.92, with a 7.98% increase from the previous trading session. This change lagged the NASDAQ gain for the day. On that day, Marathon's shares ranged from $15.24 to $16.98. The yearly mark of the stock ranged from $3.11 to $18.88, showing great potential for growth within the year. With the stock's last closing price being above the 50-day moving average of $10.75 and the 200-day moving average of $8.74, there's an indication of a potential uptrend in the future.
According to real-time data, the market capitalization of the firm stands at approximately $2.93 billion with a public float of approximately 170 million shares. The average trading volume over a period has been around 39.65 million shares. However, on the last trading day, the volume was slightly lower, standing at about 27.90 million shares.
One technical indicator, the Relative Strength Index (RSI14), is at 83, which is considered overbought territory. This could indicate a potential price reversal or a slowdown in the stock's recent upward movement. Meanwhile, the MACD, a trend-following momentum indicator, stands at 1.54 for the past three months, suggesting bullish trading activity.
Fundamental Analysis
A review of Marathon's fundamentals reveals a negative EPS of -7.12, resulting in a negative Price-to-Earnings ratio (PE) of -2.42. This demonstrates the company is currently not profitable. Furthermore, the target consensus for MARA is approximately $30.6, suggesting a significant upside from the last closing price. The high and low analyst targets stand at $66 and $12 respectively.
The company's next earnings announcement is scheduled for August 7, 2023, which could possibly lead to significant changes in the company's stock price, depending on the reported results. Moreover, the company's discounted cash flow (DCF) stands at $18.18, above the current price, indicating that the stock could be undervalued.
In terms of recent news, MARA is identified as one among three crypto-exposed stocks to monitor closely as the Federal Reserve decides on interest rates. The company also saw a mention for witnessing remarkable earnings acceleration. However, it's also labeled as a low-priced stock that requires comprehensive analysis before investment decisions due to potential unpredictability.
Prediction and Evaluation
Given the above data, it's predicted for the next trading day on July 11, 2023, that the price trend will tighten. The high RSI suggests a slowdown in the stock's recent upward movement, while the MACD indicates bullish activity. Therefore, a slight decrease in price, or at most stagnation, could occur. However, in the upcoming week, considering the average target price of $30.6, the historical performance, and the MACD value, an upward trend is plausible.
Despite Marathon's current lack of profitability, the positive news revolving around the stock, the underpriced DCF suggests good potential for the firm. However, investors should also consider the volatility of the market, especially with the stock's high RSI and its exposure to the cryptocurrency market.
Given the thorough analysis, Marathon Digital Holdings, Inc. is classified as a "Hold." The stock has notable growth potential and could provide considerable returns. Yet, the company's negative EPS and PE ratios, along with its high RSI, indicate potential risk, warranting a cautious investment approach.
