Hut 8 Strengthens Business Model, Earns "Buy" Rating from Benchmark

Following its merger with US Bitcoin Corporation, Hut 8's business model now boasts diversification, comprising revenue streams from self-mining, managed services, hosting, HPC computing, and AI. Benchmark initiated coverage with a "buy" rating and a $12 price target, citing Hut 8's strong bitcoin holdings (9,102 coins) as a liquidity cushion and potential upside during price rallies.

Hut 8 Bolsters Business Model, Earns 'Buy' Rating from Benchmark

Following its merger with US Bitcoin Corporation in November 2021, Hut 8 Mining Corp. (HUT) has significantly diversified its business operations, leading to a 'Buy' rating and $12 price target from Benchmark.

The merger has resulted in a multi-faceted revenue ecosystem that encompasses self-mining, managed services, hosting, high-performance computing (HPC), and artificial intelligence (AI).

"Hut trades at a discount to its bitcoin mining peers, but we anticipate this gap to narrow as the company advances its self-mining expansion strategy," stated analyst Mark Palmer in Benchmark's research report issued on Monday.

As of March 31, 2022, Hut 8 held 9,102 bitcoins in reserve, ranking it among the top-tier listed miners. This substantial crypto asset base provides a solid liquidity buffer for the company.

"The bitcoin reserve endows Hut 8 with a sizeable liquidity cushion and positions it to benefit during price rallies in the cryptocurrency," the report noted. The value of the company's crypto holdings currently stands at approximately $592 million, constituting roughly 82% of its market capitalization.

Since the merger's completion, Hut 8's management has prioritized measures to minimize its bitcoin mining costs and energy consumption while simultaneously boosting cash flow.

The diversified business model of Hut 8 distinguishes it from its peers, as evidenced by its involvement in multiple revenue-generating sectors. This diversification strategy is expected to bolster the company's financial resilience and long-term growth prospects.

In the wake of the merger with US Bitcoin Corporation, Hut 8 has positioned itself as a formidable player in the bitcoin mining industry, armed with a diversified business model and substantial crypto asset reserves. The 'Buy' rating from Benchmark underscores the company's strong fundamentals and potential for future growth.