How good is Marathon Digital stock as crypto continues to whipsaw?
- Marathon Digital trades close to the lowest in the year amid lower crypto fortunes.
- MARA is attractive despite expectations of lower earnings.
- The stock is one to watch, but investors should not buy now.
Marathon Digital Holdings, Inc. (NASDAQ:MARA) has oscillated between $10-$20 for some months now. The stock touched a low of below $5 at the start of July. Although trading higher at $12, Marathon Digital remains under pressure.
Marathon is a digital asset company. The company is involved in the generation of crypto and has invested in Bitcoin. Consequently, the downsides in digital assets have hugely affected MARA.
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In its second quarter, Marathon Digital reported revenue of $24.92 million or £22.05 million. That represented a decline of 15% from the prior year. The company’s net loss widened by 76% to $191.65 million or £169.6 million in the same period.
Heading into the third quarter, investors have low expectations of Marathon Digital. The company’s net loss per share is expected at $0.35, compared to a net income of $0.85 last year. The expectations reflect continuing crypto slump and falling mining incomes. However, we see MARA as a stock to watch.
MARA price recovers slightly but remains bearish
Technically, MARA is bearish. A slight recovery is evidenced by an uptick in RSI from the near oversold level. Nonetheless, the 50-day MA could curtail short-term price appreciation.
Should you buy MARA
Investing in MARA makes sense on account of the low stock valuation. The stock’s range trading suggests buyers are trying to arrest a further decline at the current level.
Potential recoveries in cryptocurrencies would be a bull trigger for the stock. In fact, Jefferies had forecasted MARA to trade at $51 by the end of the year. However, the challenges remain as digital assets are struggling. MARA could face additional decline if cryptocurrencies fall again.