JPMorgan Double Downgrades MARA Holdings Inc (MARA) to Underweight

JPMorgan analyst Reginald Smith downgraded MARA Holdings Inc (NASDAQ: MARA) from Neutral to Underweight with a price target of $11.00 (from $13.00).

The analyst comments "We are moving to an Underweight rating on MARA as we see more direct growth and value accretion from data center opportunities from peers within our coverage universe. While many legacy Bitcoin miners have pivoted their business models to redirect existing power capacity to AI HPC (high powered compute) use cases, MARA has opted to pursue a capital-light strategy. Rather than spending capital building and operating data centers for colocation, MARA plans on participating in the AI data center opportunity by contributing powered land sites to a JV with Starwood Digital Ventures. Under the JV, SDV will assume all responsibilities relating to design and development, tenant sourcing, and operations, with MARA’s only involvement being the contribution of sites and in certain scenarios a small portion of additional capex. We see diluted value creation from the company’s JV strategy to convert its powered land assets to data center capacity. While the JV structure limits MARA’s capital at risk, the strategic partnership relies heavily on Starwood’s ability to sign, develop, finance, and operate data center assets with only 50% of the value being captured by MARA. We see limited upside to this strategy and prefer HPC peers that control the entire process and are working to sign, develop, and operate data center assets long-term. By solely providing powered land, MARA sits at the bottom of the data center value chain. While the company expects to announce 2 deals by year end, we do not believe these will materially impact MARA’s earnings profile, which is significantly influenced by Bitcoin mining. Importantly, MARA has reported negative adj. EBITDA over the past three quarters and needs Bitcoin to maintain the ~$80,000 level to run at breakeven at the company’s current operating structure. We move to an Underweight rating and establish a Dec-27 PT of $11 (vs. a Dec-26 PT of $13 prior)."

For an analyst ratings summary and ratings history on MARA Holdings Inc click here. For more ratings news on MARA Holdings Inc click here.

Shares of MARA Holdings Inc closed at $11.98 yesterday.

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