Marathon Patent Group (MARA) is aiming to become the largest Bitcoin miner in the United States by next year. The company will operated over 23,000 miners by Q2 2021 as it attempts to profit from rising Bitcoin prices.
Here are a couple of reasons why I think the stock is a good buy:
- Bitcoin is an appreciating asset – Hate it or love it, Bitcoin is up big ever since its inception. With only 16 million Bitcoins in circulation, it is a proven asset class for storing wealth. The dollar loses value while Bitcoin is somewhat scarce and goes up over time.
- Bitcoin Mining is Profitable – Miners like Marathon Patent group can generate around 15 to 20 Bitcoins per month under full capacity. That means the company will earn $6 million+ after they build out its mining network.
- MARA stock is undervalued – MARA stock is currently under $1 billion market cap as it enters a new era of Bitcoin. If Marathon can earn $6 million per month in revenue then that makes MARA stock look pretty cheap. $72 million in annual revenue will give MARA stock a P/S ratio of around 4 at current levels. That's a great deal.
- Cryptocurrency Will Become Mainstream This Decade – Many people have never used or own Bitcoin before. Larger crpyto demands means higher prices. As Bitcoin continues to soar in price, Bitcoin miners like MARA will earn larger profits over time.
- More Growth from Spinoff Services – Once full capacity is reached, MARA may offer other Bitcoin related services to earn more money. Riot Blockchain (RIOT) has already done this and Marathon may follow their lead.
Future MARA Stock Prediction & Price Target
MARA stock currently sits around $5 per share and revenue is projected to grow massive in 2021. If we give MARA a conservative P/S ratio of 5 to 10, that means the stock will be worth $15 by Q2 2021.
To reach this number, I simply took the future projected monthly revenue of $6 million then multiplied by 12. $72 million in annual revenue x 10 = $722 milllion market cap. That's around 3x the current price and as long as Bitcoin continues going up, bitcoin miners will rise in value.
Bitcoin mining will be big business in the future. Of course, there are only a few million bitcoins available for mining but I don't expect Bitcoin to run out of available coins to mine for a long time. Until that happens, MARA stock looks like a strong buy.
Future MARA Stock Price Target = $15
Remember, this is just a projection based on my personal research. Do your own research and use stop loss orders to limit your downside risk. Thanks for reading!