Marathon Digital Holdings Stock Price in 5 Years: Will Investing in Bitcoin Pay off for Mara?
What will MARA stock price be in five years? l Credit: Hameem Sarwar/CCN.com
Key Takeaways
- Marathon Digital Holdings has experienced rapid growth, transforming from a struggling company to a major player in Bitcoin mining.
- The company has fully committed to Bitcoin, holding a significant portion of its mined Bitcoin rather than selling it immediately.
- Analysts predict significant growth for Marathon’s stock price in the coming years.
Marathon Digital Holdings has recently dramatically transformed from a patent monetization company to a major player in the Bitcoin mining industry. The company’s aggressive investment strategy, including a recent $249 million Bitcoin purchase, has solidified its position as a significant Bitcoin holder and reflects unwavering confidence in the cryptocurrency’s long-term value.
However, while it focuses on investing in crypto—and Bitcoin in particular—it’s no longer profitable, raising concerns over its future stock performance.
Massive Investments In BTC
Marathon Digital Holdings, a major player in Bitcoin mining, has significantly increased its Bitcoin holdings. The company recently purchased $249 million worth of Bitcoin, bringing its total reserves to over 25,000 BTC. This aggressive investment strategy signals strong confidence in Bitcoin’s long-term value.
By holding onto its mined Bitcoin, Marathon aims to benefit from potential price appreciation. This approach, often called “HODLing,” has become increasingly popular among Bitcoin investors.
MARA recently launched a $250 million convertible note offering primarily for Bitcoin acquisition. This follows its $100 million BTC purchase, solidifying Marathon’s position as a significant Bitcoin holder.
Marathon’s notes, maturing in 2031, are aimed at institutional investors, with proceeds intended for Bitcoin purchases, strategic acquisitions, and other corporate purposes. Last month, Marathon boosted its holdings to over 20,000 BTC, worth $1.3 billion.
Past Five Years Stock Performance
Marathon Digital Holdings (MARA) wasn’t always a major player in Bitcoin production. By the summer of 2019, the company was primarily focused on monetizing patents, with a market value of just $22 million, and teetering on Nasdaq compliance issues. It used a 4-for-1 reverse stock split to maintain its listing.
However, Marathon began installing 6,000 high-end Bitcoin mining computers and committed fully to crypto mining. Today, Marathon operates 250,000 mining systems with 800 megawatts of power across 12 sites. In the first quarter of 2024, it produced 2,811 Bitcoin and now focuses on the crypto king and energy management.
With a market cap of $7.2 billion and a share price of $25.55, Marathon has transformed. An investment of $1,000 in July 2019 would be worth about $12,000 today, compared to the S&P 500’s doubling over the same period. Despite volatile returns and significant capital investment, Marathon’s focus on Bitcoin has yielded impressive growth.
Marathon’s investment peaked at $34,000 just before the inflation crisis hit the booming crypto market in 2021, but its value plummeted to $1,560 by the end of 2022.
Is Marathon Digital Profitable?
The most recent MARA’s results are those of the second quarter of 2024. In the three-month period, net loss soared to $199.7 million – equal to $0.72 per diluted share -, up from $9.0 million ($0.07 per share) in the same period last year. This was mainly due to unfavorable fair value adjustments for digital assets under new accounting rules.
Adjusted EBITDA fell to a loss of $85.1 million from a gain of $35.8 million in Q2 2023, driven by a $148.0 million decline in digital asset values and lower BTC production.
Revenues jumped 78% to $145.1 million, primarily due to a $78.6 million rise in the average BTC price, despite a $23.9 million drop in BTC production. The company mined 868 fewer BTCs in the second quarter 2024 due to the April halving event, higher global hash rates, and equipment failures, though these issues were later resolved. The company sold 51% of its BTC to cover operating costs.
Fair value loss on digital assets was $148.0 million in the second quarter of 2024, a significant increase from $25.2 million in the same quarter of 2023, largely due to unfavorable mark-to-market adjustments and reduced BTC production.
Where Are MARA Shares Headed?
Marathon Digital Holdings (MARA) is projected to report a loss of $0.27 per share next quarter, with estimates ranging from a loss of $0.52 to a gain of $0.04. This follows a previous quarter’s loss per share of $0.72. Over the past year, MARA has exceeded its EPS estimates 75% of the time. It outperformed its industry, which beat EPS estimates 63% of the time.
For the upcoming quarter, MARA’s sales are forecasted at $157.67 million, with a range between $121.50 million and $172.00 million, up from $145.14 million last quarter. However, MARA has only beaten its sales estimates 25% of the time over the past year, compared to its industry, which beat sales estimates 82% of the time.
Marathon Digital’s stock price has seen a 19% increase since the beginning of 2024, starting at $13.70 and reaching $16.24. Analysts see the stock to end 2024 at $19.48, marking a 42% year-over-year increase. The rise from today’s price to year-end represents a 20% gain. Looking further ahead , Marathon Digital’s price is expected to climb to $20.43 in the first half of 2025 and reach $23.76 by year-end, representing a 46% increase from the current price.
Over the next five years, Marathon Digital may experience significant growth , with its price rising from $23.76 in early 2026 to $61.51 in 2030, a 159% increase. By the end of 2026, the price will reach $34.35, marking a 112% gain from today’s level.
