Canaan, a prominent player in the bitcoin mining sector, is facing hurdles but has significant upside potential, suggests Benchmark analyst Mark Palmer. On Tuesday, Palmer initiated ongoing coverage of Canaan’s American Depository Receipts (ADRs) with a buy rating and a $3 price target. Currently trading at $0.62 per share, Canaan’s stock has plummeted 72% this year.

Key Insights:

• Mark Palmer has assigned a buy rating to Canaan, with a projected price target of $3.
• The company’s current challenges don’t reflect the growth potential from its expanding self-mining operations, particularly in the U.S.
• Canaan holds 1,408 bitcoins, valued at approximately $133 million, representing nearly 70% of its market capitalization, a factor Palmer believes will bolster the company’s valuation.

Singapore-based Canaan (CAN) specializes in the development of ASIC chips and mining machinery. Palmer’s evaluation highlights Canaan’s dual strategy of producing mining equipment while expanding their self-mining efforts. This differentiates them within the bitcoin industry and positions them well for both hardware sales and mining revenue.

“Canaan’s vertically integrated model sets it apart in the bitcoin mining arena,” Palmer elaborated, noting that the company has ambitious plans to significantly increase its computing power for self-mining operations by mid-2025, aiming for 10 EH/s in North America and a total of 15 EH/s globally.

Learn more about this analysis and the company’s potential with the full report on CoinDesk.