Is Bitfarms a Good Crypto Mining Stock to Buy for 2022?

Shares of Bitcoin self-mining company Bitfarms (BITF) have gained more than 150% in price over the past year, benefiting from bullish trends in the cryptocurrency space. However, the stock traded in a downtrend last month, with bitcoin dropping significantly from its all-time high in November. Moreover, with analysts anticipating a crypto crash in the coming months amid increased government regulations, the question becomes, is BIFT an ideal investment now? Read on to find out our point.

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Canada-based blockchain infrastructure company Bitfarms Ltd. (BITFMines for coins and crypto tokens in North America. The company secured nearly 60,000 new generation miners in 2021. BITF expanded its international presence significantly throughout the year, increasing its operating capacity by 53%, while increasing its hash rate by 228%. The BITF mined 363 new BTC during December 2021, which is a better 82% increase from the beginning of the year bringing its total in 2021 to 3,452. The company expects this momentum to continue into 2022.

BITF’s share price rose 165.8% over the past year and 28.2% over the past six months to close yesterday’s trading session at $5.05. The company has captured the attention of investors due to the growing crypto market, which was worth $2 trillion at the end of last year, with bitcoin up nearly 70% since the beginning of 2021. However, the stock is currently trading below the 50-day and 200-day moving averages day, indicating a downtrend. The stock price is down 34% over the past month and 12.9% over the past five days.

BIFT’s correlation with bitcoin’s movements and the broader crypto market makes it highly volatile. It has 2.03 beta. Moreover, increased regulatory scrutiny and severe price fluctuations Bitcoin’s Prospects Have Dimmed Lately. In fact, some experts have warned that the cryptocurrency market could see a sharp decline in the coming months. Bitcoin is currently trading at less than $50,000, and analysts predict it could drop to as much as $10,000 in 2022. “Without a doubt, Bitcoin price chart seems to track several historical asset bubbles and crashes and holds a narrative” this time around. “Just like that,” said Todd Lowenstein, chief equity strategist at Union Bank’s private banking arm. In addition, the Federal Reserve’s tighter policies and increased government interest in regulating the crypto space could lead to continued volatility.

Here’s what could shape BITF’s near-term performance:

mixed profitability

BITF’s gross margin of 61.77% is 25% higher than the industry average of 49.42%. Its EBITDA margin of 52.14% is 261.6% higher than the industry average of 14.42%.

However, the BITF’s return on equity and transportation tax of 4.70% and 2.20%, respectively, are 43.3% and 39.3% lower than the industry averages. And the net income margin of 5.84% is 8.8% lower than the industry average.

Solid third quarter earnings report

BITF revenue increased 559% year over year to $44.77 million in the fiscal third quarter ended September 30. Its operating income came in at $34.09 million, indicating a significant increase from its negative value last year. Its net income grew 598% year over year to $23.73 million. The company’s earnings per share increased 316.7% year-over-year to $0.13.

mixed rating

In terms of the 12-month P/E multiple, BITF is currently trading at 94.06x, which is 195% higher than the industry average of 31.88x. Also, 5.52 forward exposure value / sales The ratio is 30.6% above the 4.22 industry average.

However, the 12-month BITF price/book is 32.9% lower than the 4.65x industry average and the forward EV/EBIT value is 47.9% below the 21.10x industry average.

POWR ratings reflect uncertain prospects

BITF has an overall C rating, which translates to neutral on our property POWR . ratings the system. POWR ratings are calculated by taking into account 118 characteristic factors, with each factor weighted to the optimum score.

The stock has a rating of C for value, which corresponds to its mixed rating.

BITF has a stability score of F, coinciding with a high beta.

Out of 122 stocks rated D Financial Services (Projects) Industry, BITF ranked #80.

In addition to what I mentioned above, you can also view BITF scores for Quality, Growth, Momentum, and Feeling here.

View the highest rated stocks in the Financial Services Industry (Enterprise) here.

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Analysts are anticipating volatility in the cryptocurrency market, with Bitcoin dropping significantly, erasing its gains in the past year. Moreover, government regulations in the crypto space are expected to be stricter this year, which could increase market volatility. BITF’s performance has been closely correlated with crypto moves, making it a risky bet. Therefore, given the mixed valuation of the stock, we believe it might be wise to wait for the broader crypto market to stabilize before investing in the stock.

How does Bitfarms Ltd. (BITF) versus peers?

While the BITF has an overall POWR rating of C, one might want to look at its industry peers, Forrester Research, Inc. (boil), Donnelley Financial Solutions, Inc. (DFIN) and Santander Consumer USA Holdings Inc. (SC), which has an A (strong buy) rating.

Note that DFIN is one of the few stocks currently selected by our Chief Growth Strategist, Jaimini Desai, in the POWR Growth portfolio. Learn more here.


BITF shares were trading at $5.27 per share Tuesday morning, up $0.22 (+4.36%). Year-to-date, the BITF is up 4.36%, versus a 0.96% rise in the benchmark S&P 500 over the same period.


About the author: Subhasree Kar

Subhasree’s keen interest in financial instruments led him to pursue a career as an investment analyst. After completing her master’s degree in economics, she gained knowledge of equity research and portfolio management at Finlatics.

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