Marathon Digital Holdings (MARA) Benefitting From Bitcoin Rally and Positive Implied Move
$Marathon Digital(MARA.US$ is expected to report a 407.0% increase in revenue to $144.08 million from $28.42 million a year ago, according to the mean estimate from 7 analysts, based on LSEG data.
Analyst estimate for Marathon Digital Holdings Inc is for earnings of 3 cents per share and expected to show a rise in quarterly revenue when it reports results on 28 Feb for the period ending 31 Dec 2023.
Bitcoin (BTC-USD) resumed its bull run on Monday after weeks of trading sideways, a move that pulled up cryptocurrency-related stocks.
Bitcoin climbed 1.17% to $55.5K at time of writing, making new highs for the year. Prior to the ascent, bitcoin had consolidated in a narrow range just above $50K since mid-February. We have seen crypto-tied stocks moved higher, with Marathon Digital (MARA) +19.4%, $Riot Platforms(RIOT.US$ up 13.4%, $CleanSpark(CLSK.US$ up 25.3%.
I would expect MARA to report a stronger than expected result as the demand from Spot Bitcoin ETF have driven Bitcoin prices higher, MARA is one of the beneficial of this rally.
Technical is showing that MARA is experiencing an uptrend currently, and this should continue after it post its earnings.
Marathon Digital Holdings (MARA) Last Reported Earnings
MARA last reported earnings on 08 NOv 2023 after the market close (AMC). MARA shares gained +8.0% the day following the earnings announcement to close at 9.23. Following its earnings release, 110 days ago, MARA stock has drifted +216.3% higher.
From the time it announced earnings, MARA traded in a range between 8.84 and 31.30. The last price (29.19) is closer to the higher end of range.
Estimated implied straddle for upcoming earnings is 15.2%. With a strong Bitcoin rally crossing $55K, we should be seeing MARA having a price effect of more than 8% after its earnings, as there is already a 8% increase after its last earning in Nov with Bitcoin rally as well.
Marathon Digital Holdings (MARA) Post Earnings Movement
The options market overestimated MARA stocks earnings move 75% of the time in the last 12 quarters. The predicted move after earnings announcement was ±10.9% on average vs an average of the actual earnings moves of 7.1% (in absolute terms).
Though option valuation is overvalued, we could see some price volatility trading, but with Bitcoin rally support, we should be seeing a more than 10% implied move after its earnings release if Bitcoin continue to stay above $50K.
Summary
MARA should be able to enjoy the Bitcoin rally as the company have been mining Bitcoin and used some of the mined coin for their expenses. MARA have been increasing their mining capabilities over time, so the economic efficiency mining should bear fruit now.
I will be looking forward to MARA report on its earnings from Bitcoin mined after they have increased the mining farm.
Appreciate if you could share your thoughts in the comment section whether you think MARA would provide a better than 3 cents per share earnings?
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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