Assessing Bitfarms (TSX:BITF) Valuation As It Exits Latin America To Pursue North American AI Growth

Bitfarms (TSX:BITF) shares are back in focus after the company agreed to sell its 70 MW Paso Pe mining site in Paraguay, exiting Latin America to concentrate on North American data center and HPC or AI infrastructure opportunities.

See our latest analysis for Bitfarms.

Investors have been weighing this refocus alongside other recent changes, such as the appointment of a new Board Chair to support Bitfarms' planned redomiciling to the U.S. The CA$3.78 share price reflects a 3 month share price return of a 41% decline, a 1 year total shareholder return of 62%, and a 3 year total shareholder return of about 16x, suggesting momentum has cooled in the short term even as longer term holders have seen strong gains.

If this AI and data center shift has your attention, it could be a good moment to see what else is moving in high growth tech and AI stocks.

With Bitfarms posting a 3 month share price decline alongside a 1 year total return of 62% and a 3 year return of about 16x, investors may ask whether today’s price represents a fresh entry point or whether future growth is already fully reflected in the share price.

Most Popular Narrative: 55.4% Undervalued

With Bitfarms last closing at CA$3.78 against a narrative fair value of about CA$8.48, the gap between current pricing and modeled upside is wide enough to stand out.

Development of large scale HPC/AI campuses in emerging data center hubs like Pennsylvania, supported by robust enterprise demand, political tailwinds, and partnerships with top tier developers like T5, positions Bitfarms for sustained earnings growth and margin expansion through long term, contracted revenue streams.

Read the complete narrative.

Curious what kind of revenue ramp, margin shift, and future earnings multiple are baked into that story? The most followed narrative spells it out in detail.

Result: Fair Value of CA$8.48 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this hinges on Bitfarms actually securing approvals to convert mining capacity to HPC and AI use, as well as on finding funding for large capex plans without straining cash flows.

Find out about the key risks to this Bitfarms narrative.

Another View: Market Ratios Flash A Caution Sign

That CA$8.48 fair value narrative sits awkwardly beside current trading ratios. Bitfarms is on a P/S of about 6x, compared with roughly 3.9x for the Canadian Software industry and a fair ratio of 2.6x, so the market is already paying a premium. Is that a sign of comfort, or of crowding?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Bitfarms Narrative

If you are not fully on board with this view or you prefer to rely on your own work, you can test the numbers yourself in minutes with Do it your way.

A great starting point for your Bitfarms research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If Bitfarms has sparked your interest, do not stop there. Broaden your watchlist and give yourself more options before the next big move arrives.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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