Riot Platforms, Inc

Riot Platforms, Inc (NASDAQ: RIOT) is a company focused on Bitcoin mining and digital infrastructure. It runs Bitcoin mining operations in central Texas and Kentucky, along with electrical switchgear engineering and fabrication operations in Denver, Colorado. The company operates a Bitcoin-powered infrastructure platform and is divided into two segments: Bitcoin Mining and Engineering.

Recent Business and Financial Updates

• Third Quarter 2024 Financial and Operational Performance: Riot’s total revenue for the third quarter of 2024 was USD 84.8 million, compared to USD 51.9 million during the same period in 2023. The growth was primarily attributed to a USD 36.3 million increase in Bitcoin mining revenue. The company produced 1,104 Bitcoin during the quarter, a slight decrease from the 1,106 Bitcoin mined in Q3 2023. Despite the impact of the block subsidy 'halving' event in April 2024 and a rise in network difficulty, the company maintained consistent production levels.
• Bitcoin Mining Costs and Power Credits: The average cost to mine Bitcoin, excluding depreciation, was USD 35,376 per Bitcoin in Q3 2024, a significant increase from negative (USD 22,741) per Bitcoin in the same period last year. This rise was mainly driven by a 75% reduction in power credits, the block subsidy halving, and a 59% increase in the global network hash rate. Riot generated USD 12.4 million in power credits during the quarter, down from USD 49.6 million in Q3 2023, reflecting the changes in credit receipts.
• Revenue Breakdown and Profitability: Bitcoin mining revenue for the third quarter was USD 67.5 million, a substantial increase from USD 31.2 million in Q3 2023, primarily due to higher average Bitcoin prices and an increase in operational hash rate. However, these gains were partially offset by higher network difficulty and the block subsidy halving. Engineering revenue amounted to USD 12.6 million, compared to USD 15.5 million for the same period in 2023. The company also recorded USD 4.8 million in other revenue, which was derived from third-party hosting services.
• Gross Profit and Loss: Riot’s Bitcoin mining gross profit, excluding depreciation, was USD 28.4 million, resulting in a Bitcoin mining margin of 42%. This was a decrease from the previous year’s USD 56.4 million, or a margin of 181%. The engineering segment, however, reported a gross loss of USD 0.9 million, compared to a gross profit of USD 2.3 million in Q3 2023. The company also faced a significant drop in power curtailment credits, which totaled USD 12.4 million in Q3 2024, compared to USD 49.6 million in the prior year.
• Hash Rate Growth and Future Expectations: Riot’s anticipated self-mining hash rate capacity for the end of 2024 is 34.9 EH/s, lower than the previous forecast of 36.3 EH/s. This adjustment is primarily due to delays in the expansion of its newly acquired Kentucky facilities, which are now expected to come online in 2025. The company has also revised its 2025 hash rate capacity expectations, now projecting 46.7 EH/s by the end of 2025, down from the prior forecast of 56.6 EH/s. The full development of the Corsicana Facility is now expected by 2026, with plans to achieve 65.7 EH/s by the end of 2026, alongside further expansion in Kentucky.
• ATM Offerings and Equity Financing: In August 2024, Riot entered into the August 2024 ATM Offering, allowing for the sale of up to USD 750.0 million in common stock. During the nine months ending September 30, 2024, the company raised approximately USD 730.8 million in net proceeds from the sale of 70.1 million shares at a weighted average price of USD 10.65 per share. After September 30, 2024, the company raised an additional USD 62.1 million from the sale of 8.1 million shares at an average price of USD 7.81 per share. As of October 30, 2024, Riot had 332.3 million shares of common stock outstanding.
• Bitcoin Production and Operations: In October 2024, Riot produced 505 Bitcoin, a 23% increase from September, driven by a rise in deployed hash rate to 29.4 EH/s. The Corsicana Facility contributed to this growth with new MicroBT miner deployments. Riot is nearing completion of Phase 1 (400 MW) and has begun developing Phase 2 (600 MW) of Corsicana, with operations expected to begin in 2025.

Technical Observation (on the daily chart):

RIOT's stock price has shown resilience at lower levels and has recently experienced a substantial increase. Currently, the price is approaching a trendline resistance zone, which suggests the possibility of short-term consolidation. The 14-day Relative Strength Index (RSI) is above the midpoint, indicating the potential for a downside correction. On the other hand, the stock is trading above its 50-period simple moving average (SMA), which may serve as a support level in the near term. Identifying key support and resistance levels will be essential for pinpointing potential trend reversals and continuations

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to Riot Platforms, Inc (NASDAQ: RIOT) at the current market price of USD 12.54 as of December 02,2024 at 07:40 AM PST.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is December 02, 2024, at 07:40 AM PST. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.