Crypto mining rig maker Canaan (CAN) is entering a stronger growth phase, according to Wall Street broker Benchmark, which raised its price target for the company’s American depositary receipts (ADR) to $4 from $2 and reiterated its rating on the stock.
Shares rose 5% in early trading Thursday, around $1.79.
Leading analyst Mark Palmer said the company’s prospects have improved now that Nasdaq has confirmed that Canaan has regained compliance with listing rules, removing a key excess that had dampened liquidity and investor interest.
With that issue resolved, Palmer said attention may return to improving fundamentals, particularly growing demand for its Avalon mining rigs and the expansion of its bitcoin self-mining operations.
The analyst pointed to the growing traction of the Avalon product line, highlighted by Canaan’s largest US order in three years for more than 50,000 Avalon A15 Pro units as evidence that the company is regaining market share in the mining hardware space.
Palmer also highlighted subsequent purchases of its immersion-optimized A1566I rigs by CleanSpark (CLSK) and highlighted the compact Avalon Q as a potential future play in the consumer mining segment.
On the self-mining side, Canaan’s September update showed 9.3 exahashes per second (EH/s) of capacity deployed, 92 bitcoins mined during the month, and digital asset holdings of approximately 1,582 BTC and 2,830 ETH.
Benchmark said the company’s average energy cost of $0.042 per kilowatt hour (kWh) remains among the most competitive in the industry and should continue to decline through better energy aggregation and site selection.
With the compliance issue behind us, shipments of 50,000 Avalon A15 Pro rigs expected in the fourth quarter and a growing low-cost self-mining footprint, Benchmark said Canaan is positioned for further share price gains.
The stock’s recent weakness offers an attractive entry point, the report added.
Read more: Canaan Stock Jumps More Than 12% as It Lands Biggest U.S. Order in 3 Years
