Riot Blockchain, Inc.
Riot Blockchain, Inc. (NASDAQ: RIOT) is a cryptocurrency mining company that uses specialized computers (miners) equipped with application-specific integrated circuit (ASIC) chips to solve complex cryptographic algorithms in support of the Bitcoin blockchain (a process known as block solving) in exchange for cryptocurrency incentives, primarily Bitcoin (BTC).
Valuation Methodology: EV/Sales Multiple Based Relative Valuation
(Analysis by Kalkine Group)
* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
RIOT's stock price has fallen 81.6% in the past nine months and is currently leaning towards the lower end of its 52-week range of USD 6.25 to USD 46.28. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 7.99.
Considering the significant correction in the stock price, debt-free balance sheet, strong margins, current valuation, and associated risks. We recommend a "Speculative Buy" rating on the stock at the current price of USD 6.71, up 4.3% as of May 26, 2022, 08:40 AM PDT.
1-Year Technical Price Chart (as on May 26, 2022, at 08:40 AM PDT). Source: REFINITIV, Analysis by Kalkine Group
Technical Analysis Summary:
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.
Note 3: The report publishing date is as per the Pacific Time Zone.