Sign InSummary
Marathon Digital Holdings, Inc. (MARA) is engaged in Bitcoin mining and its stock has seen a recent increase, although its current profitability situation and bearish trend suggest a cautious approach, but optimistic price targets and presence in the growing Bitcoin field offer potential for the stock to be held and monitored for improvements in earnings and the market trend of cryptocurrencies.
Fundamental Analysis
Marathon Digital Holdings, Inc., trading under the ticker MARA, is engaged in the digital currency industry, specifically Bitcoin mining. The company closed its last trading session on October 23, 2023, at USD 8.75, posting an increase of USD 0.99 or approximately 12.76% from the previous session.
With a market capitalization of approximately USD 1.85 billion, MARA has 211.55 million shares outstanding. The company's earnings per share is recorded as -4.08, indicating that the company is not making profits currently. The PE ratio is hence negative, -2.14, reflecting the company's non-profitability for the time being.
According to the price targets given by analysts, the company has a highly optimistic high target of USD 66, a low prediction of USD 12, and a median target of USD 24. The consensus target stands at USD 30.6. Market consensus categorizes MARA as a "Buy", though the company has received 2 of each, 'Buy' and 'Hold' ratings, with no 'Strong Buy', 'Sell', or 'Strong Sell' indications.
The discounted cash flow (DCF) analysis shows a valuation of 9.66, above its recent closing price, something that is often interpreted as an indicator of a potentially undervalued stock.
Marathon Digital Holdings, Inc. is expected to release its upcoming earnings announcement on November 6, 2023.
Technical Analysis
Over the last trading session, MARA's closing price was USD 8.75, having fluctuated between a low of USD 7.74 and a high of USD 9.02. The year-to-date high and low for this stock stand at USD 19.88 and USD 3.11, respectively.
MARA indicates a positive trend in its Relative Strength Index (RSI14) value of 66 which is generally interpreted as a bullish sign. However, things are a bit different in case of moving averages. Its 50-day and 200-day moving averages stand at 10.05 and 10.07, respectively, which is above its most recent closing price indicating a bearish trend. Similarly, a negative MACD (3-month) of -0.65 also suggests a bearish trend.
The Average True Range (ATR), a technical analysis indicator that measures market volatility, is 9.32. The stock possesses a stop-loss level at about USD 8.43, a support level at USD 8.53, and a resistance level at USD 9.79.
Relevant News
The recent news released on October 23, 2023, illustrates that the company is among the few beneficiaries of the rising Bitcoin trend where most other stocks are in the red.
Earlier news from October 17, 2023, notes that the Federal Reserve's interest rate hikes could lead to a market downtrend, pointing out three stocks, including MARA, which could be affected.
Conclusion: Stock Evaluation
Given the company's current profitability situation and a bearish trend indicated by moving averages and MACD, its current stock performance might suggest a bearish sentiment. However, optimistic price targets from analysts, a relatively high RSI, and the company's presence in the growing field of Bitcoin mining, alongside a potentially undervalued DCF value presents positive outlooks for Marathon Digital.
Therefore, given the potential of MARA to capture market benefits associated with the rising trend in Bitcoin and considering the technical and fundamental analysis, it is suggested to Hold the stock at this stage. This might be an opportunity for investors to wait and monitor any significant improvement in the earnings as well as the market trend of Bitcoin and cryptocurrencies as a whole. It's worth noting that those who are considering investing in MARA should bear in mind their own tolerance for risk, particularly given the relatively high volatility associated with the cryptocurrency market, and consider adding a diversified set of holdings to balance potential impacts.
