RIOT Platforms (NASDAQ) Has Rewarded Patient Investors with Eye-Popping Returns

Patient investors who bought shares of Riot Platforms (NASDAQ:) have been richly rewarded over the past five years.

The bitcoin (BTC-USD) mining company’s stock price has soared 594% during this period, which works out to a 47% compound annual growth rate. To put this into perspective, the S&P 500 has generated a total return of 117% over the same period, while the broader crypto market has seen even greater volatility.

The stock recently enjoyed a stellar week, surging 24% and adding $518 million to its market value in just seven days. This marks a significant milestone for Riot, especially considering the challenging quarter that saw the share price decline by 29%.

Year-to-date, the stock is down 27.3%, contrasting sharply with the broader market’s 9% gain during the same timeframe.

A key factor in the company’s journey has been its shift from operating in the red to becoming profitable, which is likely a significant contributor to the substantial share price appreciation over five years.

As Riot ventures beyond its core cryptocurrency mining activities, it is actively pursuing partnerships with artificial intelligence and high-performance computing firms to lease space at its facilities in Corsicana and Rockdale.

New Investors Spar Changes

The company has also come into the crosshairs of major investors. Activist investor D.E. Shaw is the latest to take an interest, disclosing a new position in Riot in its recent 13F filing.

This follows hedge fund Starboard Value’s investment in the company last year, which led to some changes at the leadership level.

Earlier this year, Riot announced a reshuffle of its board composition, and the company also completed its long-awaited Corsicana facility.

The involvement of these financial heavyweights suggests they see potential value in Riot that the market may not yet fully appreciate.

Riot is set to announce its first-quarter fiscal 2025 results on May 1, after markets close.

Analysts expect the company to report an adjusted loss of $0.33 per share, which compares with the $0.82 profit per share reported for the same quarter last year.

However, the revenue outlook appears much stronger.

Analysts at (MS) are forecasting Q1 revenue to come in at $159.62 million, which would be an impressive 101% increase compared to the first quarter of fiscal 2024.

Despite some near-term caution, analyst Patrick Moley of (Piper Sandler) remains optimistic on RIOT stock.

Earlier this month, Moley trimmed his price target on the stock from $23 to $18, but even the revised target, at 142.6% upside from current trading levels.

His valuation model is based on 7 times Riot’s projected fiscal 2026 revenue figures.

Key Topics to Watch

The upcoming earnings call will be closely monitored for insights into several key topics.

Investors will be keen to hear about the progress of the Corsicana facility feasibility study, as the company seeks to identify potential tenants for its large-scale computing capacity.

Another crucial area of focus will be on the status of negotiations with potential AI and HPC partners, as Riot aims to diversify its revenue streams beyond cryptocurrency mining.

Given the significant share price impact of prior hashrate guidance updates, any new guidance on the company’s mining operations will also be closely scrutinized.

Finally, with bitcoin prices remaining highly volatile, investors will be interested in hearing how Riot is managing its bitcoin treasury and any plans it may have for deploying these digital assets.

Analyst Sentiment Remains Bullish

Overall, analyst sentiment toward RIOT stock remains overwhelmingly positive.

The stock has earned a Strong Buy consensus rating on TipRanks, based on 10 unanimous Buy recommendations from Wall Street analysts.

The average price target stands at $16.75, which implies that the stock could more than double from its current price.

Despite the challenging start to 2025, with the stock down 27.3% year-to-date, the recent weekly surge of 24% may indicate a potential turning point in market sentiment.

This contrast between the stock’s short-term struggles and its impressive five-year performance highlights the volatile nature of companies operating in the cryptocurrency space.

As Riot pivots toward new revenue opportunities and expands its operations, the coming months will be critical for determining whether the company can sustain its momentum and capitalize on the emerging trends in artificial intelligence and high-performance computing.