Why Hive Stock Jumped 11% on Tuesday

As cryptocurrency prices skyrocket, Hive (TSXV:HIVE)(NASDAQ:HVBT) stock reported strong earnings that beat its past record performance.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published February 15, 2022 2:15 pm EST

| More on: HIVE

HIVE Blockchain Technologies (TSXV:HIVE)(NASDAQ:HVBT) shares climbed 11% in early trading on Tuesday after Hive stock reported record earnings.

What happened?

Hive stock reported earnings up 397% year over year and 30% quarter over quarter to $68.2 million. The cryptocurrency company’s net income also rose 273% to $64.2 million, achieving record results.

Hive stock ended the quarter with 1,813 Bitcoin worth $83.1 million and 23,290 Ether worth $84.9 million. The gross value increased from $15 million to $168 million the year before — an incredible 11 times increase.

So what?

The chief financial officer puts the massive growth on the decision to not sell the mined cryptocurrency. Instead of borrowing at expensive rates, it took on a “modest equity” funding strategy, and this helped generate the highest returns possible, even compared to peers.

And while a lot of the growth comes from cryptocurrency prices skyrocketing, it also has to be noted that Hive stock increased production as well. This comes from its acquisitions in Quebec and the Atlantic, along with the purchase of miners for these facilities.

Yet with all this growth, the cryptocurrency stock remains incredibly cheap. It currently trades at 8.26 times earnings and 3.09 times book value. Analysts mark it as a solid buy and believe it could almost double in share price during the next year.

Now what?

Hive stock has had quite the journey over the last few years. It’s come down from 52-week highs and is 18% down so far in 2022. This comes not from the company’s performance, however, but from the performance of Bitcoin and Ether during this time.

Meanwhile, it continues to take on acquisitions through a conservative approach that should continue to garner investor trust. That being said, the cryptocurrency market remains volatile. While long-term investors may see great growth from Hive stock, there’s no telling what the next year will bring.