HIVE Digital: Great Seasonality And A Bullish Chart Setup

Summary HIVE’s price has dropped, but the value proposition is now even stronger with a bullish technical setup and clear line in the sand. Seasonality is favorable for HIVE in June and July, and revenue/earnings estimates have improved significantly since January. HIVE’s mining capacity and efficiency are set to surge, with major growth expected in both Bitcoin mining and HPC/AI segments. Valuation is extremely attractive on both price-to-sales and tangible book value, supporting my reiterated strong buy rating. Back in January, I covered small-cap Bitcoin miner HIVE Digital ( HIVE ) , calling it a strong buy at the time. I had my reasons, including firm price support at $2.80. That didn’t work out, however, as the massive slide in equities globally into the April low saw HIVE blow right through $2.80 on the way to $1.26. Events like that are why we use stops, and why we don’t become bag holders. At any rate, this stock is well-off from where I called it a strong buy; has my view changed? Not really, and below I’ll detail why the value proposition is even better today than it was five months ago. An Extremely Bullish Setup I recognize my last call was wrong, and that’s fine; it happens. I noted the line in the sand was $2.80, and if you sold at that point, your losses were minimized. Today, my line in the sand is the rising 50-day SMA, which we can see below in blue. StockCharts That level is currently $1.77, which is 12 cents below where the stock closed on Friday. It’s also rising, so it will gradually drift higher as the days go on. I would not hold HIVE under that line. Now, why do I say this is extremely bullish? We have a series of higher lows, two rising moving averages, and the 20-day EMA ahead of the 50-day SMA. So long as the 50-day SMA holds on any pullbacks, this is a textbook uptrend setup. The momentum indicators are mixed. The PPO is bullish, the RSI is neutral, and the Chaikin Money Flow index is bearish. With that in mind, I’d become more bullish if we had a sustained move in the RSI ahead of 60, and a reading above zero on the CMF. But for now, the price chart itself is enough for me, and I really like this chart. Bullish Seasonality And A Stock That’s Just Too Cheap Before we look at the fundamentals, I’d be remiss if I didn’t mention seasonality. HIVE has only been public for a few years, but have a look at June and July. Seeking Alpha Returns are hugely positive for this time of year, lending credence to the idea that if you’re going to own HIVE, you really couldn’t select a better time. The opposite is true of August and September, so that’s something to watch for, but the chart and seasonality are lining up nicely. Let’s kick things off with a look at where estimates stand. Seeking Alpha The last three revisions have been down, which is obviously not something we want. I will say, however, that when I covered HIVE in January, estimates for 2027 were for just 27 cents in earnings; that’s gone all the way to 41 cents today. Similarly, estimates for 2025 have risen from a loss of 24 cents to a loss of 16 cents. Revenue estimates have exploded higher as well, with 2026 sales rising from $221M to $360M today. In other words, unless these estimates are just nowhere close to reality, HIVE has gotten enormously cheaper in the last five months. HIVE has now also passed 10EH/s in peak hashrate. The company expects 11.5EH/s by the end of this month, on its way to 25EH/s by the end of its Q4. In addition to ramping to 25EH/s, efficiency is set to rise pretty significantly as well. Investor presentation Today’s efficiency is something like 18 J/TH, but it should improve to 16.5 later this year. That helps reduce mining costs, which boosts mining margins. Investor presentation This table is illustrative of what HIVE’s mining operations could look like once it’s fully built out at 25EH/s. At the current Bitcoin price, HIVE expects mining margin of about $330M annually. At $150K per Bitcoin, it’s more like $575M. HIVE’s margins are enormously dependent upon the price of Bitcoin, as is any company that mines anything (gold, silver, copper, etc.). If you’re bullish on HIVE, you are bullish on Bitcoin. As we’re looking at those mining margin numbers, let’s remind ourselves that HIVE’s market cap is $300M as of Friday’s close. We can see below that relative to other miners, HIVE is tiny today. That’s set to change as we reach the end of September, assuming HIVE’s 25EH/s capacity comes online as expected. Investor presentation Other miners are growing as well, but HIVE has the most relative growth coming based upon current info. Mining is a relative game, so HIVE is going to be much more competitive in a few months than it is today. The other piece of the equation here is that the company’s HPC and AI growth is set to be outstanding in the coming months. Investor presentation Annual recurring revenue in Q1 was $15M, but is set to be $100M by the end of this fiscal year. If HIVE gets anywhere near that, again, that’s a great growth lever for a stock with a $300M market cap. Is It Really That Cheap? HIVE’s valuation, as I mentioned above, has gotten much better. That’s true if you’re using 2027 EPS estimates, or if you’re looking at price-to-sales and tangible book value. Let’s start with P/S. TIKR Today, shares are at 1.16X forward sales. Its three-year average has been 2.56X, which is obviously a 120% premium to today’s price. I don’t see how there is any conclusion I can draw from this chart other than the stock is cheap. In addition, we can use tangible book value, and it’s unbelievably cheap there as well. TIKR The most recent TBV reported was $3.10 against a share price of $1.89. As we can see below, shares at 0.61X TBV is well below the 1.51X average. TIKR In conclusion, HIVE is absolutely very cheap. If growth plans in both Bitcoin mining and HPC come to fruition, HIVE should be even cheaper in the coming months. With a bullish setup in the chart, and what I view as a favorable fundamental backdrop aligned with a cheap valuation, I’m reiterating my strong buy rating on HIVE.

Source: Seeking Alpha