Is Marathon Digital (MARA) a Good Stock to Buy before Earnings?

Shares of Bitcoin miner Marathon Digital Holdings (MARA) are up in today’s trading as investors await its Q1 earnings results on May 8. Analysts are expecting earnings per share to come in at -$0.25 on revenue of $219.4 million. This equates to a 119.8% decrease for the former but a 32.8% year-over-year increase for the latter, according to TipRanks’ data.

It’s worth noting that MARA has had a mixed track record when it comes to beating earnings. In fact, it has only exceeded estimates five times during the past eight quarters.

Increasing Production Figures

Separately, the company recently provided its Bitcoin production update. In April, Marathon produced 705 Bitcoins, which was down 15% from the previous month. However, the firm saw a 5.5% increase in its energized hash rate (the number of calculations a miner can perform per second) to 57.3 EH/s.

The company now holds 48,237 BTC, which is worth roughly $4.64 billion at the time of writing. This is also the reason why earnings are expected to drop and become negative – Marathon has decided to hold onto more of its Bitcoins rather than selling them into the open market, therefore preventing it from officially realizing any net income.

What Do Options Traders Anticipate?

Using TipRanks’ Options tool, we can see that options traders are expecting a 7.9% move from MARA stock in either direction right after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement.

It’s worth noting that MARA’s after-earnings price moves in the past 13 quarters have mostly been smaller than the 7.9% that is expected. This implies that current option prices are potentially overvalued.

Is MARA a Good Stock to Buy?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on MARA stock based on four Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average MARA price target of $19.81 per share implies 48.1% upside potential.

See more MARA analyst ratings