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Is Marathon Patent Stock a Buy Right Now? This Is What You Need to Know

TipRanks
·2 min read

Some segments of the stock market provided investors with unseemly gains in 2020. Not to be outdone, over the last few months, the cryptocurrency space has kicked off a rally of its own, led by leader of the pack bitcoin.

As it makes perfect sense, whenever bitcoin rallies, so do the stocks closely associated with it. And so, to bitcoin miner Marathon Patent (MARA). Marathon shares have added a massive 1300% over the last 12 months and according to H.C. Wainwright analyst Kevin Dede, the surge is set to continue.

Dede reiterated a Buy rating on MARA shares and boosted his price target from $9 to $17. Investors could be pocketing gains of 25%, should Dede’s thesis play out over the coming months. (To watch Dede’s track record, click here)

Barely a month has passed since Dede last upgraded his Marathon price target. The previous upgrade came after the company announced it is purchasing another 10,000 top-of-the-line Bitmain S19 Pro Antminers.

However, Marathon’s latest announcement, says Dede, “takes the cake.” Last week, the company said it had put in an order for an extra 70,000 Bitmain S19 miners, thereby more than tripling the 33,000 miners it currently owns. An initial batch will arrive in July with the last shipment anticipated by December 2021.

Accordingly, Dede raised his sales forecast for 2021 from $67.5 million to $161.2 million, while his EPS estimate becomes “discernibly positive at $1.10 per share.”

While Dede concedes that at first glance Marathon’s gamble on bitcoin could be interpreted as an 'all-in poker bet,' the analyst praises the company’s conviction and believes the purchase establishes Marathon as “the front running industrial bitcoin miner in North America.”

“We applaud Marathon's commitment to its beliefs while leveraging its Bitmain hegemony to create a mining network beyond North American compare, at least as far as our research indicates to date,” the analyst said. “Further, as icing on the bitcoin cake, Marathon has strapped Bitmain's production through the next 12 months, locking would be contenders out of ‘easier’ mining winnings near term, based on current bitcoin pricing levels.”

Marathon still appears to be flying under Wall Street’s radar and Dede’s is the sole current review. It will be interesting to see if others come on board shortly, particularly if bitcoin extends its rally. (See MARA stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.