Why Bitfarms Plunged More than 12% Following Earnings
Key Points
Bitfarms reported Q3 numbers, which showed improvements in revenue, but the company's loss per share stayed the same.
Both Bitfarms' revenue and earnings missed analyst expectations, leading many to expect analyst downgrades on the horizon.
With a drop of more than 12% in morning trading on Thursday, it's clear the market is souring on the growth potential of this once-hot sector.
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As of noon ET, Bitfarms (NASDAQ: BITF) is among the biggest movers in the market -- unfortunately on the downside. Shares of BITF stock declined 12.8% since yesterday's close, after the company reported earnings that market participants are clearly viewing in a very negative light.
Let's dive into what the company announced, and why investors appear to be choosing this particular report to sell shares in this Bitcoin mining company.
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What do the numbers say?
Image source: Getty Images.
By all accounts, Bitfarms reported some very strong numbers, at least when one considers them at face value.
The company's Q3 revenue surged 156% year over year to $69 million, with a loss per share coming in at $0.05 (same loss as the past quarter, and down from a loss of $0.07 in Q1).
Unfortunately, these results both missed analyst expectations. Wall Street had pegged the company's revenue at $85 million, with an EPS loss per share of $0.02 expected. Thus, this was a top- and bottom-line miss, and reflects continued concerns around mining margins and the company's profitability outlook, with many in the market seemingly delaying their projections for when Bitfarms will see its income statement return into the black.
Now, Bitfarms did announce a strategic pivot toward utilizing some of the company's compute capacity to support digital infrastructure projects in the artificial intelligence (AI) and cloud space, and one may have thought the market would view this shift positively. However, as spending on mining infrastructure for the company's core Bitcoin mining operations continues, and the outcome of this rollout remains uncertain, investors are clearly taking the "under" on future earnings expectations, at least over the course of the next year.
What to do with Bitfarms stock right now?
For those holding BITF stock, I'd say it's a tough time to be invested in this space, and this particular company. Bitfarms has lagged other peers that have announced similar pivots, and it's unclear whether this pivot will be able to meaningfully offset Bitcoin mining revenues (and over what time frame).
The market appears to be viewing Bitfarms as a relative laggard. And despite the company's low-cost energy sources and impressive compute (which is growing), it's unclear whether a rising price of Bitcoin will be enough to take this stock higher from here. That's a view that appears to be growing more mainstream, especially considering the more than 70% year-to-date surge in BITF stock investors have enjoyed thus far in 2025.
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Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
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