Should you invest in Marathon Digital stock as crypto prices bounce back?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Jul 26, 2021
  • Marathon Digital shares spiked more than 16% on Monday amid a surge in crypto prices.
  • It holds patents related to encryption and started buying bitcoin mining companies in the last few years.
  • Therefore, with bitcoin and other crypto prices rising, is it time to buy MARA shares?

Marathon Digital Holdings Inc. (NASDAQ:MARA) shares spiked more than 16%, Monday, at the time of writing, as cryptocurrency prices continued to extend last week’s gains. The bitcoin (BTC/USD) price is up nearly 19% since the start of last week, while Ethereum (ETH/USD) is up almost 30% in the past week.

Marathon Digital shares are still down nearly 50% from the highs of about $56.56 reached in April when Bitcoin hit the current all-time high of $64,789. Therefore, as the BTC and other cryptocurrency prices continue to recover, Marathon Digital will have more room to run before retesting its current year-to-date high.

Why invest in Marathon Digital shares in Q3 2021?

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Marathon Digital shares trade at an attractive forward P/E ratio of 8.53, making the stock a compelling opportunity to value investors. Analysts expect MARA earnings per share to grow by 75.70% this year before rising further 30.36% next year. 

Its 5-year average annual earnings growth of about 50% will be compelling to growth investors. And as bitcoin and crypto prices continue to rise, MARA stock will also benefit. Therefore, Marathon Digital has several catalysts to boost the stock price in the coming quarters. As such, it is not too late to buy despite this year’s gains of 161%.

Source – TradingView

Technical overview: Marathon Digital price predictions for August 2021

Technically, Marathon Digital shares appear to be extending last week’s gains after spiking 16% on Monday. Since Tuesday, the stock price is now up nearly 30%, but it still seems to have more room left to run. MARA stock is yet to hit overbought conditions in the 14-day RSI and is some distance below the 100-day moving average.

Therefore, investors can target extended gains at around $33.84 or higher at $38.11. The key support levels are $24.14 and $19.47.

Bottom line: the catalyst for buying Marathon Digital shares now

Although Marathon Digital shares are up nearly 30% since last week, the stock seems to have more room left to run, trading a few levels below the 100-day moving average. 

The company’s valuation is compelling to value investors, while earnings growth prospects will attract growth investors. Therefore, it is not too late to buy MARA stock.

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