Crypto mining rig maker Canaan (CAN) is entering a stronger growth phase, according to Wall Street broker Benchmark, which raised its price target on the company’s American depositary receipts (ADRs) from $2 to $4 and reiterated its rating on the stock.
Shares were up 5% in early trading Thursday, around $1.79.
Benchmark analyst Mark Palmer said the company’s prospects have improved now that Nasdaq has confirmed Canaan is back in compliance with listing rules, removing a key overhang that had dampened liquidity and investor interest.
Once that issue is resolved, Palmer said the focus could return to improving fundamentals, particularly growing demand for its Avalon mining rigs and expanding its Bitcoin self-mining operations.
The analyst highlighted the growing appeal of the Avalon product line, highlighted by Canaan’s largest U.S. order in three years for more than 50,000 Avalon A15 Pro units, evidence that the company is regaining market share in mining hardware.
Palmer also noted subsequent purchases of its immersion-optimized A1566I rigs by CleanSpark (CLSK) and called the compact Avalon Q a potential future in the consumer mining segment.
On the self-mining side, Canaan’s September update showed 9.3 exahashes per second (EH/s) of deployed capacity, 92 bitcoins mined for 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 is expected to continue to decline through better energy aggregation and site selection.
With the compliance issue behind it, 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 stock price gains.
The stock’s recent weakness offers an interesting entry point, the report added.
Learn more: Canaan shares jump more than 12% as it secures largest U.S. order in 3 years
