Bitfarms Ltd.: Optimistic With The Buyback Plan And US Exposure Into 2026

Summary I rate Bitfarms as a hold, highlighting its upcoming share buyback and strategic US expansion as key growth drivers. Despite 32.8% YoY revenue growth, BITF’s significant net losses and rising costs, especially from Argentina, weigh on near-term profitability. The Stronghold acquisition and US energy pipeline are expected to reduce costs and improve operational efficiency into 2026. BITF trades at a fair valuation with potential upside, but execution of the buyback and asset growth are crucial for future performance. I have watched the evolution of cryptocurrency, particularly Bitcoin mining, which has evolved from a small-scale venture to an energy-intensive operation conducted on an industrial scale. Over the last five years, Bitcoin ( BTC-USD ) has increased by 967.82%. Back in 2022, I wrote about MicroStrategy ( MSTR ) as a solid tracker of BTC, and it is up 703.95% (since then). Earlier on, I had focused on CleanSpark ( CLSK ) and its expanded mining activities, including sustainable mining, and the stock has since gained 19.09% (from 2021). In this article, I will explain why I am rating Bitfarms Ltd. ( BITF ) as a hold in light of the company’s buyback plan and its renewed focus on the US as a strategic location for growth. However, I will consider the growth in net losses ahead of Q2 2025 earnings that may hamper the stock’s rally into 2026, if it persists. Bitfarms’ Strategic Realignments Into 2026 Bitfarms, a Canadian operator of data centers and a Bitcoin miner, is set to purchase 10% of its public float (of 499 million shares) in a share buyback plan beginning on July 28, 2025, and continuing through July 27, 2026. This 1-year program will see BITF retire about 49,943,031 common shares. As of July 29, 2025, BITF had a market capitalization of $710.32 million and an outstanding share balance of 557,548,857. At the current price of $1.24 (per share), BITF is likely to spend $62 million in the buyback plan. This change is likely to increase the share price past $1.30, and an increase in the market cap, as it will be seen in this article. The acquisition of Stronghold by BITF in Q1 2025 also set the stage for the company’s expanded opportunities in the US (to about 80% of its North America energy portfolio, against 20% – international), which will prove pivotal in the future. It is all about the vertical integration and control of its power with the US exposure. In essence, a Bitcoin miner’s proximity to ample sustainable energy (in this AI race) is critical for revenue growth and cost optimization. Then again, the reduced rewards for blocks after BTC halving in 2024 also warrant BITF’s growth into high-performance computing (HPC) and AI to create long-term value for shareholders. Q1 2025 saw BITF record a 32.8% (YoY) revenue growth to $66.8 million against a net loss of $35.9 million vs. a net loss of $6 million in Q1 2024. Costs of revenues in Q1 2025 rose to an all-time quarterly high of $67.4 million. This increase is partly attributed to the acquisition of Stronghold Digital and asset write-down in Argentina. Revenues in Argentina declined 40% (YoY) to $6.955 million in Q1 2025 from $11.576 million in Q1 2024. The company also explained in its Q1 2025 management analysis that the supply of electricity to its Argentine facility in Rio Cuarto had been halted, affecting the intended long-term contract of up to 210 MW. In regard to operational efficiency, about half of the company’s revenue ($37.3 million) was proceeds from the sale of 428 BTC (from the total 693 BTC earned in the quarter) at an average price of $87,000. Seeking Alpha Currently, BTC is selling at $118,140, indicating an increase of about 36% (from the last sale by BITF), slightly shy of its all-time high of +$120,000. Despite the high net losses, BITF has developed its culture of paying for its expenses using operating revenues that have been growing into 2026. Looking forward, BITF now has the energy infrastructure to reach the intended upside exposure coupled with rising BTC prices. By Q2 2025, BITF has about 1,166 BTC recorded in its balance sheet, and it has an opportunity to invest a significant amount of capital into its HPC and AI. Further, about 37.7% of its cost of revenues, or about $25.408 million, was attributed to energy expenses, which will be significantly reduced with the acquisition of Stronghold and the US expansion that is set to give a growth energy pipeline of nearly 1.1 GW in the US state of Pennsylvania (in the long run). As of May 2025, the total contracted energy capacity in BITF’s 15 BTC data centers (spread between North and South America) stood at 908 MW. Thus, the operationalization of the Stronghold energy pipeline will help to lower BITF’s costs into 2026 and improve the company’s profitability. Valuation I will use the net asset value per share metric to evaluate BITF since the company has a steady asset cover against liabilities. BITF has high net losses that undermine profitability, thereby making the price-to-earnings ratio ineffective. BITF’s net losses have increased 500% (YoY) in Q1 2025, while the adjusted EBITDA dropped 35% (YoY) to $15.1 million, down from $23.32 million in Q1 2024. I believe net asset value per share will provide a stable valuation, and I will then use this metric to determine the future price of the company. As of Q1 2025, BITF’s asset balance stood at $777.003 million against liabilities valued at $112.294 million. Total equity into Q2 2025 is $664.709. It is noteworthy that BITF is expected to reduce its outstanding share balance by 10%, meaning that the outstanding share balance in 2026 (from the buyback plan discussed earlier) will be 507,605,826 shares. We will get the future price of $1.31 by dividing the total equity of $664.709 million by the expected outstanding share balance. This calculation shows that BITF’s future price will be trading at a fair valuation of +5.65% (YoY). We have to keep in mind that the growth in BITF’s US activities will increase the asset balance by 2026, thereby leading to a subsequent increase in the total equity. Asset Liabilities Net asset value (total equity) Outstanding share balance Future share price Current share price Valuation difference BITF $777.003 million $112.294 million $$664.709 million 507.606 million $1.31 $1.24 +5.65% (trading at fair valuation) Rezolve AI PLC ( RZLV ) $19.8 million $57.8 million -$38 million 243.7 million shares $0.16 $2.75 -94.2% (greatly overvalued) Cognyte Software Ltd. ( CGNT ) $491.5 million $275.7 million $215.8 million 72.9 million $2.96 $9.12 -67.54% (greatly overvalued) CLSK $2.657 billion $766.5 million $1.891 billion 280.9 million shares $6.73 $11.73 -42.63% (overvalued) MSTR $43.92 billion $10.394 billion $33.526 billion 273.4 million $122.63 $394.66 -68.93% (overvalued) As seen in this net asset valuation analysis, only BITF is trading at a fair valuation with a potential upside into 2026. RZLV has a negative equity balance, meaning that it is insolvent (as far as its liabilities are concerned). MSTR and CLSK have a strong balance sheet as far as their asset values to liabilities are concerned. However, these companies have recorded significant dilution or an increase in the number of outstanding shares, that have led to lower forecasts. For instance, MSTR realized a 54.11% (YoY) growth in its outstanding share balance from 177.4 million shares as of March 2024 to 273.4 million by March 2025. CLSK realized a 23.26% (YoY) growth in its outstanding share balance in 2025, which has negatively impacted this forecast into 2026 despite the company’s robust asset balance. Risk I have factored in the buyback plan announced by BITF in my valuation. Failure to actualize this share repurchase program will adversely affect BITF’s share performance, as elucidated in this article. I also expect the company to grow its asset cover into 2026 as it advances its US activities by stabilizing its energy infrastructure. Bottom-Line I have rated Bitfarms Holdings as a hold in this analysis with a focus on its buyback plan and continued expansion into the US. However, the company realized significant net losses into Q2 2025 that have dampened profitability. Still, my analysis shows the company is trading at a fair valuation with a potential upside into 2026. I will be looking forward to the release of its Q2 2025 earnings in August 2025 for the update.

Source: Seeking Alpha