Bitcoin Boosts Canaan's Mining Output, But 1 Risk Could Stall Progress

Canaan Inc.'s CAN May press release indicated that 109 bitcoins were mined, up 25% from April's figure, driven by favorable prices of the world's leading cryptocurrency, according to Rosenblatt Securities.

The Canaan Analyst: Analyst Kevin Cassidy reaffirmed a Buy rating and price target of $5.

The Canaan Thesis: While Ethiopia remains the company's largest mining site, U.S. operations have grown, Cassidy said in the note.

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Canaan also announced a share buyback program worth $30 million for the next six months, he added.

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The company bitcoin mining operation contributes around 15% of total revenue, the analyst stated. "Canaan remains focused on increasing its self-mining capacity while maintaining low-cost energy efficiency," he further wrote.

With tariff discussions stabilizing and bitcoin prices rising, the visibility into the company's sales of mining rig equipment has improved, "though management will need to refill their supply chain," Cassidy said.

CAN Price Action: Shares of Canaan had risen by 6.8% to 71 cents at the time of publication on Monday.

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