On Friday, MARA Holdings (MARA) stock demonstrated impressive resilience, outperforming its peers despite posting first quarter results that fell short of Wall Street’s expectations. Analysts attribute this positive stock performance to the company’s strategic focus on reducing costs.
Recent insights from Jefferies suggest that as Bitcoin’s BTC price shows signs of recovery in the second quarter, MARA’s commitment to sustainable energy sources—such as solar and flared gas data centers—could translate into reduced power costs in upcoming quarters, ultimately improving margins. Analysts, including Jonathan Petersen, noted that “MARA is expanding infrastructure at its 114 MW wind farm and has fully energized its 25 MW micro flared gas data center, both of which should drive down power costs.” This proactive approach towards energy efficiency posits a favorable outlook for profit margins.
Petersen further indicated that if MARA continues acquiring sustainable energy sources, it stands to enhance profitability in the long run. He maintained a hold rating on the stock while incrementally raising its price target from $13 to $16.
Bitcoin mining, historically a lucrative sector, has faced a dramatic downturn in profit margins during the recent bear market, exacerbated by the halving event halving rewards for miners. Furthermore, escalating power costs have added a significant strain on margins. This challenging environment has compelled many miners to branch out into alternative revenue streams, including hosting artificial intelligence (AI) and high-performance computing (HPC) data centers.
Notably, MARA distinguished itself by initially resisting the rush into AI, instead pursuing diversification through transaction revenue services, a mining pool, actively buying Bitcoin on the open market, and exploring innovative ways to lower power costs via green energy solutions.
MARA’s strategy of prioritizing cost-effective energy solutions resonated well with the market. Analyst Kevin Dede from H.C. Wainwright highlighted what sets MARA apart from competitors, stating that the company’s persistent focus on technology developments in power conversion aims to effectively drive energy costs towards zero. Dede reinforced his buy rating for MARA, with an ambitious price target of $28, while affirming that the company is positioned to benefit significantly by harnessing unused power and improving overall power efficiency.
On Friday, MARA’s shares leaped by as much as 9%, contrasting sharply with the CoinShares Valkyrie Bitcoin Miners ETF (WGMI), which dipped approximately 0.3%. With growth strategies focusing on cost-reduction and sustainable practices, MARA Holdings appears poised for resilience amidst a turbulent market landscape.
Read more: MARA Holdings Cut to Sell at Compass Point Ahead of Earnings, Citing Cash Burn
