Analysts at Noble Capital Markets have repeated their ‘Outperform’ rating on Bit Digital Inc (NASDAQ:BTBT) following its latest quarterly results, which marked the company’s first full reporting period as an Ethereum (ETH)-focused treasury and staking operation.
Their price target of $5.50 implies upside of about 140% from current levels.
The broker noted that Bit Digital continued to rapidly expand its ETH position during the period, holding roughly 122,000 ETH at the end of September and more than 153,000 ETH by the end of October, a fivefold increase since June.
Revenue for the third quarter came in at $30.5 million, compared with $22.7 million in the same period last year and just below Noble’s $31.6 million estimate.
Staking revenue rose significantly to about $2.9 million, up from $400,000 in the prior quarter, supported by higher ETH holdings and improved yield conditions.
A $168 million digital asset valuation gain contributed to reported net income of $150.9 million, or $0.47 per share.
Noble said its forecast had assumed a breakeven quarter excluding mark-to-market effects.
The company ended the period with approximately $179 million in cash and cash equivalents and about $424 million in digital assets, almost entirely Ethereum, bringing total liquidity to around $620 million. About $166 million of that total was held at the WhiteFiber subsidiary level.
After quarter-end, Bit Digital completed a $150 million offering of 4% convertible notes due 2030, and the analysts noted management’s intention to maintain leverage below 20% of ETH holdings.
The analysts also noted that Bit Digital continued to wind down its Bitcoin mining operations, producing 65 Bitcoin in the quarter, down from 83 in the second quarter.
Mining gross margin improved to roughly 32%, the highest since the recent halving, reflecting better fleet efficiency. The company reported an active hash rate of approximately 1.9 EH/s at the end of September, with average efficiency of about 22 j/TH.
General and administrative expenses increased to $33.1 million, compared with $19.7 million in the previous quarter and $13.7 million a year ago.
“The increase primarily reflects higher share-based compensation and consulting costs related to the WhiteFiber IPO and transition,” Noble noted. “Standalone Bit Digital G&A is expected to be normalized as non-recurring costs fall off and once WhiteFiber-related costs are fully separated.”