Sign InSummary
Marathon Digital Holdings (MARA) has experienced significant upward momentum in its stock price due to the bullish market sentiment on Bitcoin and cryptocurrencies, although its negative earnings per share raises concerns and it is advised to hold the stock and monitor developments in the cryptocurrency market and the company itself.
Fundamental Analysis
Marathon Digital Holdings, Inc. (MARA), a cryptocurrency mining company, recently closed at 17.06 USD on 7/20/2023. The stock exhibited a negative change of 3.01%, seeing a low of 16.82 and a high of 18.1 on the trading day. The trading volume reached 16.08 million versus the average volume of 40.66 million.
In relation to the stock's volatility, the 50 day moving average stands at 11.99, and the 200 day moving average stands at 9.03, indicating a significant bullish performance in recent months. The 3-month MACD is 2.64, further highlighting the strong upward momentum of MARA's stock price. This increased activity may stem from notable industry news and investors’ interest in cryptocurrency-related stocks due to Bitcoin's long-term prospects.
Nevertheless, the company's fundamentals highlight some concerns. MARA reported an EPS of -6.09, indicating losses and reflecting negatively on its profitability. Furthermore, its PE ratio is negative (-2.74), which suggests the company is not generating profits.
The company's market capitalization is 2.83 billion with approximately 170 million shares outstanding and the 14-day RSI is at 65, suggesting that it may be close to being overbought, thus investor caution is advised. The year's performance varied greatly with a low of 3.11 and a high of 19.88.
The stock has various target prices by investing entities, with the high target pegged at 66 USD and a low target of 12 USD. The consensus target stands at 30.6 USD while the median target is 24 USD.
Technical Analysis
Marathon Digital's stock (MARA) has been swept up in the fervor surrounding crypto stocks, enjoying a significant upward momentum reflected in its position above both its 50-day and 200-day moving averages. The MACD also suggests bullish momentum.
However, the RSI indicates that the stock is on the brink of overbought territory, and there is a possibility that the stock could experience a short-term pullback before continuing its upward trend. However, depending on the overall market sentiment for Bitcoin and other cryptocurrencies, the company's stock could continue to push upwards as investors seek exposure to these digital assets.
Forecast
Despite the fact that Marathon Digital Holdings recently received substantial attention from investors, it is crucial to be cautious given the company's negative earnings per share. However, the stock's robust ascent, propelled by bullish market sentiment on Bitcoin and cryptos, may continue in the short term.
For the next trading day, MARA's price could fluctuate in line with the broader crypto market sentiment, given its high beta. Following the highs and lows observed on 7/20/2023, the stock is expected to trade between 16.82 and 18.1 USD.
For the upcoming week, consistent with periodical highs and lows, and barring any unexpected negative news, the stock could hover around the 19.88-year high. Considering the discounted cash flow (DCF) estimate of 17.59 USD, it is implied that MARA is fairly valued at the current levels.
Evaluation and Recommendation
Even though Marathon Digital Holdings is gaining recognition and its stock has performed well due to the upward crypto market trend, its unprofitable status suggests caution. Hence, it's recommended to Hold the stock for now and monitor developments in the cryptocurrency market and within the company itself that could affect its fundamentals and trading activity.
Consider the upcoming earnings announcement on 8/7/2023, which may provide more insight into the company's financial health. Should the company demonstrate solid profitability or a positive future outlook, the recommendation may be adjusted accordingly.
