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Bitcoin Mining Rig Maker Canaan Could Have 5X Upside, Says Wall Street Analyst
Benchmark's Mark Palmer initiated coverage on the firm's roughed-up shares with a buy rating and $3 price target.
Updated May 7, 2025, 1:56 p.m. Published May 6, 2025, 1:08 p.m.
What to know:
- Benchmark's Mark Palmer initiated coverage of Canaan with a buy rating and a $3 price target.
- The bitcoin rig maker's shares don't reflect upside potential from the expansion of the company's self-mining operations, the report said.
- Canaan's stack of 1,408 bitcoin should also be supportive of its valuation, Palmer said.
Singapore-based developer of bitcoin mining ASIC chips and rigs Canaan (CAN) has had a rough run, but could be a five-bagger, suggests Benchmark analyst Mark Palmer.
Palmer on Tuesday initiated coverage of the ADRs with a buy rating and a $3 price target. The shares closed yesterday at $0.62, lower by 72% year-to-date.
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Canaan's dual strategy is focused on the development of ASIC bitcoin chips and rigs, and the expansion of its self-mining operations, especially in the United States, said Palmer.
"CAN’s vertically integrated approach differentiates it within the bitcoin mining space while positioning it to capitalize on both chip/rig sales and proprietary mining revenues," he wrote.
Canaan's push into home mining rigs has diversified the company's revenue, he further noted.
The equipment maker is also growing its self-mining capacity in the U.S. and globally.
"While the company derived just 16.3% of its 2024 revenues from its self-mining operations, it intends to increase the total computer power driving its self-mining operations by mid-2025 to 10 EH/s in North America and 15 EH/s globally," Palmer added.
Canaan has a stack of 1,408 bitcoin with a current value of around $133 million, or nearly 70% of its current market cap, said Palmer. That should be supportive of the company's valuation.
Read more: Bitcoin Miners With HPC Exposure Underperformed BTC for Third Straight Month: JPMorgan
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