Argo Blockchain Share Price Forecast November 2021 – Time to Buy ARB?
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Shares of UK-based provider of crypto mining services Argo Blockchain (LSE: ARB) are in the green today, currently trading around the 130p mark as of November 2nd (11:46 GMT). The company recently released Q3 figures which indicated a record revenue in the quarter of £19.3 million. ARB climbed 5.74% before falling back subsequently.
Argo Blockchain – Technical Analysis
According to the financial statement released by Argo Blockchain, the current market cap of the company is at £557.335 million with assets worth £139.708 million. Revenue for 2020 was at £18.96 million with a profit margin 7.61% compared to £8.62 million in 2019.
Oscillators for Argo Blockchain such as Relative Strength Index (14)(53.8), Stochastic %K (14, 3, 3)(50.4), Commodity Channel Index (20)(98.5), Average Directional Index (14)(15.3) and Awesome Oscillator(−5.9) are neutral. Moving averages such as Exponential Moving Average (10)(125.3), Simple Moving Average (10)(126.0), Exponential Moving Average (20)(125.2), Simple Moving Average (20)(122.1) and Exponential Moving Average (30)(126.2) are indicating a strong buy signal.
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Recent Developments
Argo Blockchain has been performing well since last February, despite a share price decline. It mined 93 Bitcoin or the BTC equivalent, holding around 501. The company revealed that it mined a total of 165 Bitcoin or BTC equivalent last month, bringing its total holdings to 1836 BTC. In an effort to improve performance, Argo Blockchain raised around $128 million gross profit from issuing American Depositary Shares. It has also secured a new $25 million loan from Galaxy Digital LP, increasing its total credit facility to $45 million.
The share price experienced a buying frenzy back in February which left some investors fearful of missing out on the shares. However, the share price has declined significantly since then, while its business performance has improved. While Argo Blockchain could look to raise money to fund further growth, issuing more shares dilutes existing shareholders which brings with it additional risks.
Within the past few months, Argo Blockchain has doubled down on its growth strategy, raising large sums to fund its new Texas-based mining facility While also preparing for an IPO in the United States. The company expects to increase its mining capacity by 200 megawatts(MW) and has the potential to increase output by 1000 MW. The company mined 206 Bitcoin or BTC equivalent in August alone, which generated revenues of £6.8 million. It has definitely been one of the hottest investments of the last year, increasing by more than 2500%.
Should You Buy ARB Shares?
ARB shares are still up by 1800% over the last 12 months despite falling from the highs of February. It recorded a net income of $17.3 million and an EBITDA of $28.2 million. The purchase of new machines at its Texas facility will increase the company’s total hash rate capacity to 3.7 Exahash. The company is well funded, profitable and has immense growth potential over the next couple of years.
However, there are risks here, as the Bitcoin miner’s success is largely dependant on the price of Bitcoin. If BTC price suddenly decreases. The company’s profits and revenues could also plunge along with it. It may also experience issues with creditors as the majority of its borrowings are secured against the firm’s Bitcoin holdings. This is certainly the maximum risk that investors should consider when buying ARB shares. Having said that, Argo Blockchain can be a speculative investment in spite of the risk as there is more upside to its growth potential and recent progress.
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