Shares of Bitfarms (BITF) are down at the time of writing after the Bitcoin (BTC-USD) miner provided a production update. Indeed, October Bitcoin production dropped 41% year-over-year to 236 BTC. The company, along with the broader industry, is likely still feeling the impact of the April Halving (an event that reduced the reward for mining Bitcoin).
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Nevertheless, production increased by 8.7% compared to September, when the firm mined 217 BTC. This was despite an 8% increase in Bitcoin mining difficulty. In addition, the firm saw an 80% year-over-year jump in its average hash rate (the number of calculations a miner can perform per second) to 10.6 EH/s. On a month-over-month basis, it increased by 3%.
However, CEO Ben Gagnon noted that the company is behind schedule when it comes to achieving its mid-year hash rate target of 12 EH/s. Gagnon attributed this delay to warranty servicing of the firm’s mining equipment.
Bitfarms Increases BTC Holdings
Bitfarms now holds 1,188 BTC (an increase of 42 BTC month-over-month) worth roughly $84 million at the time of writing, or slightly less than a tenth of its $888 million market cap. Furthermore, it has 802 long-dated BTC call options (up from 602 at the end of September) as part of its Synthetic HODL strategy.
Interestingly, BITF is trading at a price-to-book value of 2.04, according to TipRanks data, which suggests that the company is overvalued since it is above 1.0. Although earnings are generally a better measure of value, since BITF is unprofitable and derives most of its valuation from its Bitcoin holdings, book value seems like a more appropriate measure.
Is Bitfarms Stock a Good Buy?
Despite the seemingly expensive valuation, Wall Street analysts have a Strong Buy consensus rating on BITF stock based on three Buys, one Hold, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 62% rally in its share price over the past year, the average BITF price target of $3.83 per share implies 100% upside potential.
