Temperatures across the U.S. may be finally cooling down, but some industries are heating up. Today it looks like cryptocurrency mining is one of them. Support.com knew it when it made the strategic choice to merge with digital mining innovator Greenidge Generation (NASDAQ:GREE), a move for which its shareholders voted overwhelmingly in favor of. Despite some recent declines, one analyst sees significant potential for GREE stock.
What Happened With GREE Stock?
Fittingly, Greenidge is in the green today, up 21% as of this writing. This is a welcome change for investors, as shares had been down over the past five days
The company began to garner significant media attention in the days leading up to the Support.com merger, leading it to be flagged as a meme stock. For the past month though, since the merger’s finalization, GREE stock’s performance has been largely in the red.
This morning brought some news that Lucas Pipes, an analyst and managing director at B. Riley Securities, initiated a “buy” rating for GREE stock along with a $78 dollar price target.
What It Means
As GREE stock’s current individual share price has recently hovered primarily between $29 and $30, the type of upside that Lucas sees is significant, specifically 156.68%.
He describes Greenidge as a “leading digital asset miner that is scaling rapidly at its vertically integrated New York operations and has a further medium- and long-term growth runway via its Spartanburg, South Carolina, facility.”
Pipes has plenty of reasons to foresee this type of growth. He predicts that Greenidge will be deploying 5,386 miners over the course of 2021 with an additional 18,300 miners being added in 2022. These growth initiatives can be funded, he thinks, through free cashflow and cash on hand as well as borrowings.
Why It Matters
This type of price target may seem ambitious, but Pipes is right to note the company’s significant growth potential. The market for cryptocurrency mining is hot and Greenidge appear well-equipped to participate.
The company is also noted for its environmentally friendly tactics, which will serve it well as the clean energy boom continues. If Greenidge adds even half the miners it predicts will be required for its new operations, it mean significant and sustainable gains for GREE stock. If it adds as many as is predicted or even more, the stock could certainly hit Pipes’ price target.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.