HIVE Digital: ‘Value’ Among Bitcoin Miners

Summary HIVE Digital trades at a 57% discount to book value and at just 1.25x sales. No publicly traded miner with a top-ten market cap comes close to these levels. At a 77% BTC-backing, only MARA Holdings has a stronger ‘floor price’ backed by Bitcoin held on the corporate balance sheet. The company plans to use its ATM to fund growth, dilution is a valid concern. But with positive news on tariffs and a market desperate for a relief rally, I think HIVE will outperform other mining stocks. In December of last year, I upgraded HIVE Digital Technologies ( HIVE ) to a ‘buy’ after calling it a ‘hold’ in late-April 2024. The stock proceeded to fall more than 65% virtually in a straight line: HIVE Coverage (Seeking Alpha) What can I say? That was a bad call, and it won’t be the last one I make in my life. Such was the case even in April 2024 when my ‘hold’ designation preceded a 35% rally in HIVE. This inability to get the timing right on HIVE has been a more recent phenomenon, however. My original rating on HIVE in August 2022 was a ‘sell.’ The price of the stock at that time was $5 per share. I followed that up with a reiterated ‘sell’ in July 2023 and both of those pieces still hold up today. In this update, we’ll look at HIVE’s updated performance through December 2024 as well as valuation considerations that I think shareholders might want to consider. Recent Earnings and Production Fundamentally, I still think HIVE has more work to do from a business transformation standpoint before the company gets interesting as a long-term investment. Top-line revenue declined year over year from $31.3 million for the three months ended December 2023 to $29.2 million in the same period in 2024. HIVE Net Income (HIVE Digital Technologies) The company’s revenue is still largely dependent on Bitcoin ( BTC-USD ) mining with over 91% of HIVE’s top-line coming from the digital currency mining segment. The good news is, if you’re bullish HIVE for the HPC revenue, the company is indeed scaling that segment. After generating just $1.6 million in HPC revenue through the nine months ended December 2023, that segment is up 336% through the nine months ended December 2024 and is on pace to generate more than 8% of the top line for the full fiscal year. At $1.3 million, HIVE reported positive net income for the quarter-ended December. But bear in mind, like just about every Bitcoin mining company in the public markets, positive net income is generally due to unrealized gains on assets. For the 9 months-ended December, HIVE reported an unrealized gain on investments of $25.8 million, gains on sales of equipment of $16.4 million, and still managed to generate a net loss of $3.1 million so far for the fiscal year. HIVE Monthly Production (Company Filings, Author’s Chart) Q1 numbers will likely show margin pressures as the company mined 24 less Bitcoin sequentially but grew exahash capacity from 5.5 EH/s in December to 6.3 in March 2025. The company’s scaling plans are really just getting started. HIVE recently purchased the Yguazú mine site from Bitfarms ( BITF ). With HIVE’s other mine site in Paraguay also scheduled for completion in 2025, the company is projecting 25 EH/s this year. If the company can achieve such a number, it would make HIVE a top five publicly traded Bitcoin miner by EH/s. To fund this growth, the company is planning to tap the ATM as well as utilize BTC on the balance sheet. The ‘Deep Value’ Miner Despite the obvious profitability issues that are shared by all public BTC miners, HIVE is bordering on what I’d call ‘deep value’ in the Bitcoin mining sector. At a $1.52 per share closing price on April 9th, HIVE trades at a 57% discount to book value and at just 1.25x sales. Seeking Alpha gives the stock a valuation grade of ‘A’ and I like it down here as well. BTC Miner Comps (Seeking Alpha) There is no miner in this screen-grab above that trades at a lower multiple in either P/B or P/S metric, let alone both. Furthermore, HIVE’s long-term debt to total capital percentage of less than 3% would make it one of the least-levered stocks in the sector. What I like best about HIVE right now though is how depressed the stock price valuation is relative to other mining stocks with similar Bitcoin mining production numbers and HODL stacks. BTC Miner BTC HODL Stack BTC Value, m Market Cap, m BTC/Market Cap Marathon Digital ( MARA ) 47,600 $3,965.1 $4,300.0 92.21% Riot Platforms ( RIOT ) 19,223 $1,601.3 $2,600.0 61.59% CleanSpark ( CLSK ) 11,869 $988.7 $2,100.0 47.08% Hut 8 ( HUT ) 10,273 $855.7 $1,300.0 65.83% HIVE Digital 2,201 $183.3 $237.1 77.33% Source: Bitcoin Treasuries, as of 4/9/25 at $83.3k BTC There are over a dozen publicly traded mining stocks that have a larger market capitalization than HIVE yet only five were holding more Bitcoin at the end of March. At a 77% BTC/market cap backing, MARA Holdings – which I also think is a buy at this point – is the only miner with a larger BTC/MC. The most glaring issue for me is the capital needed to fund growth in Paraguay. Data by YCharts Up until now, HIVE has not been among the worst dilution offenders in the market and has grown shares outstanding by just 89% in the last three years. While up year over year, ‘sats per share’ at the end of December came in at just over 2k sats per share. This shows a continuation of a long-term trend down for HIVE: ‘Sats per Share’ (HIVE, Author’s Chart) I suspect this figure will be quite a bit lower in HIVE’s next quarterly report since the HODL has declined by over 600 BTC since the end of December. Still, the think the market has priced in a lot of this already. Closing Summary For me, HIVE Digital is an odd outlier in the Bitcoin mining sector. We saw companies that were prioritizing HPC/AI services as complimentary revenue streams generally well-rewarded by the market for most of 2024. HIVE appears to be one of the few BTC mining stocks that is actually generating/growing revenue in this area. Yet, the stock has been one of the worst performers in the mining space over the last twelve months. The company hasn’t diluted shareholders nearly as much as mining peers and generally has strong efficiency metrics relative to other public miners. In my view, HIVE is like a cheap call option for higher Bitcoin prices. The shares have a large BTC-backing at 77% of the market cap of the company. Higher BTC prices should push HIVE up as well, since over 90% of the company’s revenue is BTC-denominated. There are glaring long-term profitability concerns due to the economics of mining Bitcoin. But this is not a concern that is unique to HIVE in the mining sector, yet HIVE seems to be the one the market wants to punish the most. With the 90-day tariff-pause announced on April 9th and a broad equity market that is deeply oversold, the stock market may have a valid reason for a relief rally. I think the time is right for yet another attempt at a HIVE Digital long position.

Source: Seeking Alpha