Bitfarms Posts Wider Q3 Loss Despite Higher Revenues As Notes "Significant Shift" In Portfolio Towards the U.S.

Bitfarms Ltd. (BITF) came out with a quarterly loss of $0.09 per share versus the Zacks Consensus Estimate of a loss of $0.12. This compares to loss of $0.07 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 25%. A quarter ago, it was expected that this company would post a loss of $0.11 per share when it actually produced a loss of $0.07, delivering a surprise of 36.36%.

Over the last four quarters, the company has surpassed consensus EPS estimates three times.

Bitfarms, which belongs to the Zacks Technology Services industry, posted revenues of $44.85 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 0.38%. This compares to year-ago revenues of $34.6 million. The company has topped consensus revenue estimates two times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Bitfarms shares have lost about 7.6% since the beginning of the year versus the S&P 500's gain of 25.5%.

What's Next for Bitfarms?

While Bitfarms has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Bitfarms: unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.09 on $72.69 million in revenues for the coming quarter and -$0.30 on $205.52 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Technology Services is currently in the top 28% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the same industry, Marvell Technology (MRVL), is yet to report results for the quarter ended October 2024. The results are expected to be released on December 3.

This chipmaker is expected to post quarterly earnings of $0.40 per share in its upcoming report, which represents a year-over-year change of -2.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Marvell Technology's revenues are expected to be $1.45 billion, up 2.5% from the year-ago quarter.

Zacks Investment Research

Bitcoin has soared to all-time highs following Donald Trump's election win, also lifting Bitcoin mining stocks on a wave of positive sentiment. Here's a look at what to watch as several Bitcoin miners are set to report earnings before Wednesday's opening bell.

Hut 8 Corp.'s most recent mining update showed 85 Bitcoin produced in September and a hashrate of 19.5 EH/s. Investors will be looking for updated mining totals and average hashrate for the quarter, as well as an update on its GPU-as-a-service subsidiary Highrise AI, Inc. which began generating revenue in the third quarter.

Hut 8 stock notched a new 52-week high of $25.32 Monday as the price of Bitcoin reached all-time highs. Analysts expect the company to report losses of 33 cents per share and revenue of $38.468 million for the quarter.

Read Next: Super Micro Delisting Risk Puts $1.7 Billion Bond Repayment On The Line

Bitfarms Ltd.‘s October mining update showed the company's mining operations generated 236 Bitcoin and a 3% increase in average operating EH during the month. The company reported reaching its year-end efficiency goal of 21 w/TH three months ahead of schedule and recognized it is behind schedule delivering its mid-year 12 EH/s target.

Investors will be looking for updates on Bitfarms' efficiency and hashrate. According to estimates from Benzinga Pro, analysts expect Bitfarms to report losses of 10 cents per share on revenue of $48.842 million for the quarter.

Cantor Fitzgerald analyst Brett Knoblauch recently initiated coverage of Hive Digital Technologies Ltd. with an Overweight rating and a price target of $9. Knobluach highlighted Hive as one of the top 10 miners and said the market seems to be “under-appreciating the coming hash rate growth inflection.”

Hive Digital announced on Monday it will receive 6,500 Avalon A1566 miners, each offering an average computing power of 185 terahash per second (TH/s), from Canaan Inc. – ADR . The initial delivery of 500 units has already been completed and scheduled for immediate installation.

Investors will be interested in Hive's mining totals and average hashrate during the quarter when the company reports on Wednesday before the opening bell. Analysts are expecting the company to report losses of 9 cents per share and revenue of $25.69 million for the quarter, according to Benzinga Pro.

Expert Ideas: H.C. Wainwright & Co. analyst Mike Colonnese released an update on Bitcoin miners and the broader crypto sector following Trump's election win. The analyst sees clear skies ahead for the crypto industry as a "major regulatory overhang" has been lifted with the incoming pro-crypto administration.

"The future of the Bitcoin mining industry and broader crypto sector in the U.S. has never been brighter," Colonnese wrote.

Read More:

• Trump’s Potential ‘Health Czar’ Robert F. Kennedy Jr. Rattles Vaccine Stocks: ‘Shoot First Reaction’

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