Riot Blockchain (RIOT) stock has gained nearly 20 percent in the premarket trading session on July 26. The stock is on many investors' radars due to its rising short interest. What’s RIOT's stock forecast and how high can it go as Reddit traders attempt another short squeeze?
Riot Blockchain focuses on cryptocurrency mining operations in the U.S. The company is mainly focused exclusively on Bitcoin mining.
RIOT stock is going up
On July 26, shares of cryptocurrency mining companies surged significantly as investors reacted positively to the price of Bitcoin rising. Bitcoin surged over $38,000 for the first time in six weeks. One of the reasons why Bitcoin’s price is rising is due to speculation that Amazon could start accepting the cryptocurrency by the end of 2021.
Riot Blockchain and Marathon Digital both jumped 18 percent in the premarket session on July 26. Cryptocurrency mining peers including Bitfarms, Bit Digital, and Hive Blockchain also gained.
RIOT’s stock price forecast
According to estimates compiled by CNN, analysts' median target price is $48 for RIOT stock, which is 44 percent above its current price. The highest target price of $49 is 47 percent above the stock's current price, while the lowest target price of $40 is 20 percent above the stock's current price. Currently, RIOT stock is being tracked by three Wall Street analysts. All three of the analysts have a buy recommendation.
RIOT stock on Reddit
RIOT stock is among the most mentioned stocks on Reddit’s WallStreetBets community. The stock has a short interest ratio of 24 percent. If Redditors can get their act together, the high volume of bearish bets appears to be good enough to trigger a short squeeze in RIOT stock. One Reddit user mentioned that RIOT stock is worth a minimum of $40 per share.
How high can RIOT stock go?
It’s difficult to predict how high RIOT stock could go in the near term since the share price is impacted by investor sentiments and short squeezes. Among brokerages, RIOT’s highest target price is $49.
RIOT stock is a good investment, but not at this price.
In June, RIOT mined 243 Bitcoin tokens in its Texas and New York mining facilities, which brought the total number of new tokens to 1,167 in the first six months of 2021. As of July 19, the company held a total of 2,243 tokens worth roughly $69 million. RIOT intends to double its mining capacity by the end of 2022.
The company has zero long-term debt and nearly $240 million in cash and cash equivalents. Overall, the outlook looks promising. Consumers and retail investors are becoming more familiar with some of the most popular digital currencies.
RIOT has an EV (enterprise value) of around $2.5 billion. Based on this EV and analysts’ projected total revenue, its valuation multiples for 2021 and 2022 are 12.7x and 6.3x, respectively. In comparison, Marathon Digital Holdings and HIVE Blockchain Technologies are trading at NTM EV-to-sales multiples of 5.1x and 6.5x, respectively.