Bit Digital Inc (NASDAQ:BTBT) has earned a repeat ‘Outperform’ rating from analysts at Noble Capital Research, who remain bullish on the Bitcoin mining and high performance computing (HPC) firm following the release of its fiscal 2024 financial report.
“The 2024 fiscal year was transformative for Bit Digital, as the company expanded into the colocation business with the acquisition of Enovum,” Noble’s analysts wrote in a note to clients.
Notably, the company’s data center pipeline has expanded to 510MW from 288MW last quarter. This includes 156MW under a Letter of Intent (LOI), with six locations ranging from 8MW to 100MW.
The major driver of this expansion was the addition of locations in the US, with a 100MW site under LOI that could be the company's largest project to date if developed.
“Going into 2025, the company is realizing its pipeline with the execution of an Master Services Agreement in early January and a colocation agreement in early February,” analysts wrote.
Management emphasized renewed demand for H100 and H200 GPUs as a result of Chinese AI startup DeepSeek, they added.
“The company is in active discussions with new prospective customers, with demand outweighing supply,” analysts wrote.
“As a result, we believe this demand, coupled with the strong demand for B200s, could represent further expansion of the company's pipeline. We expect more agreements to be announced sooner rather than later.”
Strong balance sheet
The analysts also noted the strength of Bit Digital’s “pristine” balance sheet.
Total liquidity was $244.6 million at the end of January, including cash and cash equivalents of $74.3 million, they noted.
“We believe Bit Digital can utilize the strong balance sheet towards GPU procurements if future agreements are announced,” analysts wrote.
The company’s first quarter is expected to be a continuation of the fourth quarter as Bit Digital progresses with the expansion of its data center sites and GPU agreements.
Noble projects revenue of $24.8 million, a net loss of $13.1 million or $0.09 per share, and adjusted EBITDA of $2.4 million.
“Given the economic uncertainty and deliberate onboarding of new business at White Fiber, we are taking what we believe to be a conservative view of projections,” they wrote.
“If the pipeline is realized faster and/or if the mining business becomes more attractive, our forecasts could be low.”
Noble awarded Bit Digital a $5.50 price target, implying upside of about 130% from its share price at the time of writing.
“We believe the company offers stable cash flow through its HPC Services segment, recently named WhiteFiber, and increased risk diversification. All of this is combined with a focus on more efficient mining,” they concluded.