On Tuesday, Palmer initiated coverage of Canaan’s ADRs with a buy rating and a $3 price target. The stock closed at $0.62 yesterday, reflecting a 72% decline year-to-date.
Palmer highlighted Canaan’s dual strategy: advancing ASIC Bitcoin chips and rigs while expanding its self-mining operations, particularly in the U.S.
“CAN’s vertically integrated approach sets it apart in the Bitcoin mining industry, allowing it to benefit from both hardware sales and proprietary mining revenue,” Palmer wrote.
Canaan’s focus on home mining rigs has broadened its revenue streams, he noted.
The company is also scaling its self-mining operations in the U.S. and globally.
“Although just 16.3% of its 2024 revenue came from self-mining, Canaan aims to boost its computing power to 10 EH/s in North America and 15 EH/s worldwide by mid-2025,” Palmer added.
Canaan currently holds 1,408 Bitcoin, valued at approximately $133 million—nearly 70% of its market cap—which Palmer believes strengthens its valuation.
