Renewables And Vertical Integration Will Advance Digital Assets Despite Risks

Key Takeaways

• Proprietary technology, renewable-powered data centers, and vertical integration boost operating margins, long-term profitability, and sustainability credentials in digital asset mining.
  
• Revenue diversification into AI infrastructure and global partnerships reduces earnings volatility while capturing new markets amid growing regulatory clarity and decentralized finance adoption.
  
• Heavy reliance on bitcoin prices, energy market risks, regulatory pressure, rising competition, and technological shifts threaten MARA Holdings' stability, margins, and long-term revenue prospects.

Catalysts

Operates as a digital asset technology company in the United States.

• MARA Holdings’ transition to a vertically integrated model with large-scale ownership of energy assets and on-site generation is expected to significantly lower input costs, improve capital efficiency and unlock higher operating margins, which directly supports long-term earnings growth as adoption of digital assets accelerates globally.
  
• The company’s ability to deploy renewable energy assets and wind farms for mining, and optimize power consumption, allows MARA to benefit from the increasing investor and regulatory focus on sustainability; this should enhance their access to capital and drive net margin expansion as green mining attracts premium valuation and demand from institutional partners.
  
• MARA’s investments into proprietary technologies—such as custom liquid-cooled data centers and next-generation mining hardware—position the company to improve mining yields and extend equipment lifespan, supporting higher long-term profitability and reducing both operating and capital expenditures as the scale and efficiency of data infrastructure increases.
  
• The strategic push into AI infrastructure, with a focus on high-margin inference compute at the edge, diversifies revenues beyond bitcoin mining and taps into surging demand for localized, low-latency digital services, which can provide more stable and growing topline revenue and reduce earnings volatility across crypto cycles.
  
• MARA’s international partnerships with energy companies, coupled with expanding government acceptance and regulatory clarity for digital assets, poise the company to capture new markets, drive further revenue growth, and mitigate geographic risk as decentralized finance and digital asset adoption reshape the global marketplace.

MARA Holdings Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on MARA Holdings compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming MARA Holdings's revenue will grow by 33.1% annually over the next 3 years.
• The bullish analysts assume that profit margins will shrink from 82.5% today to 26.2% in 3 years time.
• The bullish analysts expect earnings to reach $406.1 million (and earnings per share of $0.79) by about May 2028, down from $541.3 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 41.3x on those 2028 earnings, up from 8.6x today. This future PE is greater than the current PE for the US Software industry at 33.3x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 9.07%, as per the Simply Wall St company report.

MARA Holdings Future Earnings Per Share Growth

Risks

• MARA Holdings’ core revenue and long-term earnings are heavily dependent on the price of bitcoin and mining rewards, making the business highly vulnerable to prolonged periods of low or stagnant bitcoin prices, which would significantly reduce top-line growth and profitability.
  
• The company's ongoing transformation into a vertically integrated energy provider entails substantial capital expenditures and the risk that energy costs could still rise due to environmental regulation or local energy shortages, which may negatively impact net margins and overall cost efficiency.
  
• Regulatory scrutiny and potential policy changes around cryptocurrency operations—domestically and internationally—could increase compliance costs or restrict operations, introducing uncertainty and reducing future revenue visibility and earnings stability.
  
• Increasing global competition from both new domestic entrants and international miners, particularly those benefiting from advances in mining technology or lower-cost regions (such as China’s renewed mining activity), could compress bitcoin mining profitability and erode MARA Holdings’ market share, reducing revenue and net income over time.
  
• Long-term industry risks from potential shifts in transaction validation mechanisms (such as Proof-of-Stake) and the advent of central bank digital currencies may undermine the demand for bitcoin and existing mining operations, threatening MARA Holdings’ addressable market and diminishing revenue growth prospects.

Valuation

• The assumed bullish price target for MARA Holdings is $30.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of MARA Holdings's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $30.0, and the most bearish reporting a price target of just $9.5.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $1.5 billion, earnings will come to $406.1 million, and it would be trading on a PE ratio of 41.3x, assuming you use a discount rate of 9.1%.
• Given the current share price of $13.15, the bullish analyst price target of $30.0 is 56.2% higher. Despite analysts expecting the underlying buisness to decline, they seem to believe it's more valuable than what the market thinks.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.