Riot Blockchain, Inc.
Riot Blockchain, Inc. (NASDAQ: RIOT) operates a cryptocurrency mining business that employs specialized computers with application-specific integrated circuit (ASIC) chips.
Source: Company Website
Record increase in top line: The total revenue has increased to USD 64.81 million in Q3FY21 from USD 2.46 million in Q3FY20, mainly on account of substantial growth in the blockchain sector.
Valuation Methodology: EV/Sales Multiple Based Relative Valuation
Analysis by Kalkine Group
RIOT’s share price has decreased by 57.84% in the past six months and is currently leaning towards the 52-week low of USD 12.90. Moreover, the company has reported solid jump in topline. However, losses have expanded because of higher operating expenses. We have valued the stock using the EV / Sales multiple based relative valuation methodology and arrived at a target price of USD 15.58 as of January 27, 2022.
Considering the major correction in the stock price, growing business model, strong revenue track record, risk associated and current valuation, we recommend a “Speculative Buy" rating on the stock at the closing price of USD 13.45 as of January 27, 2022.
RIOT Daily Technical Chart (Source: REFINITIV, Analysis by Kalkine Group)
Technical Summary Analysis
Technical Indicators Defined: -
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.