Hut 8 (NASDAQ:HUT) Shares Gap Up - Still a Buy?

Key Points

• Hut 8 shares opened sharply higher, rising from a prior close of $89.82 to $96.50 before later trading near $89.60.
• Analyst sentiment is broadly positive: the stock has a consensus “Buy” rating and an average price target of $146.40, although one firm issued a “Strong Sell” rating.
• Hut 8’s latest quarter was weaker than expected, with a loss of $1.27 per share versus the $0.55 expected and revenue of $74.93 million below estimates; the company also reported deeply negative net margins.

Hut 8 Corp. (NASDAQ:HUT - Get Free Report) gapped up prior to trading on Thursday . The stock had previously closed at $89.82, but opened at $96.50. Hut 8 shares last traded at $89.6030, with a volume of 827,287 shares.

Analysts Set New Price Targets

A number of equities analysts have commented on the company. Freedom Capital raised Hut 8 to a "strong-buy" rating in a report on Tuesday, August 18th. Morgan Stanley began coverage on Hut 8 in a research note on Thursday, July 23rd. They issued an "overweight" rating and a $263.00 price target on the stock. Piper Sandler increased their price objective on Hut 8 from $127.00 to $143.00 and gave the company an "overweight" rating in a research note on Thursday, August 6th. Compass Point set a $195.00 price objective on Hut 8 in a research note on Wednesday, July 22nd. Finally, Wall Street Zen lowered Hut 8 from a "sell" rating to a "strong sell" rating in a report on Saturday, August 1st. Three research analysts have rated the stock with a Strong Buy rating, eighteen have given a Buy rating and one has given a Sell rating to the stock. According to data from MarketBeat, the stock presently has a consensus rating of "Buy" and an average price target of $146.40.

Hut 8 Stock Performance

The company has a market cap of $11.52 billion, a price-to-earnings ratio of -17.02 and a beta of 4.51. The company has a current ratio of 19.35, a quick ratio of 19.35 and a debt-to-equity ratio of 4.22. The stock's fifty day simple moving average is $93.40 and its 200 day simple moving average is $88.46.

Hut 8 (NASDAQ:HUT - Get Free Report) last issued its earnings results on Wednesday, August 5th. The company reported ($1.27) earnings per share for the quarter, missing the consensus estimate of ($0.55) by ($0.72). The company had revenue of $74.93 million for the quarter, compared to analyst estimates of $79.37 million. Hut 8 had a negative return on equity of 0.97% and a negative net margin of 188.59%.During the same quarter in the prior year, the firm earned $1.18 earnings per share. As a group, analysts anticipate that Hut 8 Corp. will post -2.85 earnings per share for the current year.

Insider Buying and Selling

In related news, CFO Sean Glennan sold 6,445 shares of Hut 8 stock in a transaction that occurred on Monday, August 24th. The stock was sold at an average price of $78.76, for a total transaction of $507,608.20. Following the transaction, the chief financial officer owned 17,978 shares in the company, valued at approximately $1,415,947.28. This trade represents a 26.39% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders own 10.40% of the company's stock.

Institutional Trading of Hut 8

A number of hedge funds and other institutional investors have recently modified their holdings of HUT. BlackRock Inc. acquired a new position in Hut 8 in the second quarter valued at approximately $1,093,294,000. Sachem Head Capital Management LP acquired a new stake in Hut 8 during the fourth quarter worth $129,780,000. Oasis Management Co Ltd. increased its stake in Hut 8 by 231.5% during the fourth quarter. Oasis Management Co Ltd. now owns 2,307,683 shares of the company's stock worth $106,015,000 after acquiring an additional 1,611,653 shares during the last quarter. Avala Global LP purchased a new stake in Hut 8 in the second quarter valued at $144,602,000. Finally, Wellington Management Group LLP purchased a new stake in Hut 8 in the second quarter valued at $97,949,000. 31.75% of the stock is owned by institutional investors and hedge funds.

Hut 8 Company Profile

Hut 8 Corp. NASDAQ: HUT is a North American energy infrastructure and digital asset mining company. The company develops and operates data centers, power-generation resources and other infrastructure that support energy-intensive computing applications, including Bitcoin mining.

Hut 8 also provides services related to digital asset mining and data center operations, while pursuing opportunities in high-performance computing and artificial intelligence infrastructure. Its business is supported by a portfolio of power and data center sites in the United States and Canada.

The company was formed through the combination of Canadian Bitcoin miner Hut 8 Mining Corp.

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