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Marathon Stock Declines 15% in 3 Months: A Buying Opportunity?
MARAMarathon(MARA) ZACKS·2025-02-18 18:11

Core Viewpoint - Marathon Digital Holdings, Inc. (MARA) has experienced a 15% decline in stock price over the past three months, contrasting with a 29% rally in the bitcoin-mining industry, indicating potential challenges for the company [1] Company Performance - MARA's competitors, such as Riot Platforms, Inc. (RIOT) and HuT 8 Corp. (HUT), have shown varying performance, with HUT dropping 19% during the same period [1] - The company is currently assessing whether its stock levels present an attractive entry point for investors [2] Market Sentiment - The recent election victory of Donald Trump is believed to potentially boost the crypto market and MARA, driven by optimism regarding pro-digital asset policies [3] - Trump's previous support for deregulation in financial markets has raised hopes for a more favorable regulatory environment for cryptocurrency companies [4] Operational Expansion - MARA has increased its interconnect-approved capacity by 372 MW across three Ohio data centers, aiming for sustained mining expansion [5] - The company acquired facilities at a cost of 270,000perMW,significantlylowerthantheindustryaverageof270,000 per MW, significantly lower than the industry average of 900,000 to 1.5millionperMW,enhancingitsoperationalefficiency[5]−AnewgreenfieldfacilityinOhioisexpectedtoadd150MWofcapacity,furthersupportinggrowthandreducingrelianceonthird−partyproviders[6]StrategicApproach−MARAemploysadualstrategyinBitcoinmining,focusingonrevenuegenerationwhileaccumulatingstrategicassets[9]−ThecompanyretainsasignificantportionofminedBitcoin,positioningitselfforpotentialpriceappreciation[10]FinancialPosition−MARAmaintainsastrongliquiditypositionwithacurrentratioof4,wellabovetheindustryaverageof2.21,indicatinggoodcapabilitytomeetobligations[11]−TheZacksConsensusEstimateprojectsMARA′s2024revenuesat1.5 million per MW, enhancing its operational efficiency [5] - A new greenfield facility in Ohio is expected to add 150 MW of capacity, further supporting growth and reducing reliance on third-party providers [6] Strategic Approach - MARA employs a dual strategy in Bitcoin mining, focusing on revenue generation while accumulating strategic assets [9] - The company retains a significant portion of mined Bitcoin, positioning itself for potential price appreciation [10] Financial Position - MARA maintains a strong liquidity position with a current ratio of 4, well above the industry average of 2.21, indicating good capability to meet obligations [11] - The Zacks Consensus Estimate projects MARA's 2024 revenues at 633 million, reflecting a 63.4% increase year-over-year, with a further 50% growth expected in 2025 [13] Profitability Outlook - Despite strong revenue growth prospects, MARA is expected to report a loss of 24 cents per share in 2024, compared to earnings of 17 cents in 2023, indicating profitability challenges [14] - Losses are projected to increase to around 56 cents per share in 2025, suggesting ongoing pressure on the bottom line [14] Investment Strategy - MARA's strategic expansion and potential for a crypto-friendly regulatory environment may provide a favorable backdrop for long-term growth [17] - The company's balanced approach of immediate income generation and strategic asset accumulation, along with strong liquidity, suggests a cautious hold for investors while awaiting operational improvements [17]