Marathon Digital (MARA) stock price will be in the spotlight this week as the company publishes its first-quarter earnings report. The stock rose to $17.55 on Friday as the price of Bitcoin and other cryptocurrencies rebounded. It has risen by over 24% from its lowest level this year.
Marathon Digital earnings preview
Marathon Digital, one of the biggest Bitcoin mining companies, will publish its Q1 results on Thursday this week.
These will be important figures since they will come a few weeks after Bitcoin went through a halving event that slashed block rewards. As a result, the company will likely provide an update of its mining metrics so far.
Analysts expect the company’s revenue to be better than in the same period in 2023 because Bitcoin prices surged to a record high in the first quarter. The increase in prices likely helped to offset a drop in the number of mined coins.
The average estimate among analysts is that Marathon Digital’s revenue rose to $180.69 million in Q1, up by 253% from Q1’23. Analysts also expect its guidance to be strong, with Q2 revenue expected to come in at $179 million, a 120% increase from Q2’23.
The most recent monthly update showed that Marathon Digital produced 850 Bitcoins in April, an increase from 702 in April last year. It averaged 28.3 coins per day, also an increase from the previous 23.4.
That increase happened as the company continued boosting its output from its Ellendale location. It also increased its hash rate to a record high of 25.9 exahash and benefited from higher transaction fees around halving.
Like all Bitcoin miners, Marathon Digital will go through challenges because of halving that has reduced the number of coins it mines per day. The company has offset this by increasing its mines organically and through acquisitions. It hopes to grow its hash rate to 50 exahash by the end of the year.
Marathon Digital’s earnings come a week after Riot published mixed results. In a statement, RIOT said that it produced 1,364 coins in Q1, a drop of 36% from the same period in 2023. It attributed that drop to the increase in mining difficulty.
Marathon Digital stock price forecast
Turning to the daily chart, we see that the MARA share price formed a double-top pattern a few months ago. In most cases, this is one of the most popular bearish patterns in the market.
It has now dropped below the 50% Fibonacci Retracement level. Also, it oscillates at the 200-day moving average as bears wait for the death cross pattern to happen. A death cross happens when the 200-day and 50-day moving averages cross each other.
Therefore, the outlook for the stock is bearish ahead of earnings. If this view is correct, the stock will likely retest the year-to-date low of $14.68, which is about 15% below the current level.
The MARA stock price action will be affected by the performance of Bitcoin. It will rise if Bitcoin’s recovery continues. Also, in the long-term, big Bitcoin mining companies like Marathon, CleanSpark, and Riot will benefit as inefficient miners struggle to compete.
