The stock market swooned on Monday on growing concerns over rising COVID-19 cases with the spread of the new COVID-19 Delta variant. However, the market soon rebounded the next day. Indeed, the Dow Jones Industrial Average has reported gains for four straight days.
While the market is highly volatile now, the National Securities chief market strategist expects this volatility to set the stage for a massive comeback, with the S&P 500 hitting 4,400 by year’s end. He also predicts second-quarter earnings will exceed Wall Street estimates.
Small-cap stocks generally perform well in a bullish market. And Wall Street analysts expect small-cap stocks Marathon Digital Holdings, Inc. (MARA) and The RealReal, Inc. (REAL) to rally by more than 90% in the near term.
Marathon Digital Holdings, Inc. (MARA)
MARA is a Las Vegas-based digital asset technology company that mines cryptocurrencies focusing on the blockchain ecosystem and the generation of digital assets. Its mining hardware performs operations in support of the blockchain measured in hash rate or hashes per second. It has a $2.51 billion market capitalization.
On May 31, MARA announced the adoption and implementation of Bitcoin Core version 0.21.1, the latest update to the bitcoin client software. This should allow the company to improve scalability and lay the groundwork for future enhancements to its functionality.
On May 24, MARA agreed with Compute North to host approximately 73,000 of Marathon's previously purchased Bitcoin miners as part of a new 300-megawatt data center located in Texas. This is expected to provide flexibility to explore alternative locations while mitigating the risk of price increases.
MARA's total revenues increased 1,444.8% year-over-year to $9.15 million in its fiscal first quarter, ended March 31. Its net income improved 7,979.2% from its year-ago value to $83.36 million. The company's EPS increased 825% year-over-year to $0.87.
Analysts expect MARA's revenues to increase 5,601.9% year-over-year to $248.43 million in the current year. A $2.22 consensus EPS estimate for the current year indicates a 1,950% rise from the last year. Shares of MARA have gained 2,305.7% over the past year and 142% year-to-date.
The three Wall Street analysts that rated MARA rated it Buy. The $48.00 median price target indicates a potential 90% upside from its last closing price of $25.26. The 12-month price targets range from a low of $40.00 to a high of $54.00.
Click here to check out our Cryptocurrency Industry Report for 2021
The RealReal, Inc. (REAL)
With a market capitalization of $1.56 billion, REAL operates an online marketplace for consigned luxury goods. The company offers a wide range of products, including women's, men's, kids', jewelry, watches, and home and art products.
REAL's revenue increased 26.6% year-over-year to $98.82 million in its fiscal first quarter ended March 31. Its gross profit stood at $58.34 million, up 19.1% from the same period last year. Its cash and cash equivalents balance rose 306.8% from the prior-year quarter to $547.86 million over this period.
A $453 million consensus revenue estimate for the current year indicates a 51.9% improvement from the prior year. In addition, analysts expect the company's EPS to improve 2.9% in the current year considering the last year. REAL has gained 19.9% over the past year.
Of the 11 Wall Street analysts that rated REAL, eight rated it Buy while three rated it Hold. The $45.60 median price target indicates a potential 165% upside from its last closing price of $17.21. The 12-month price targets range from a low of $26.00 to a high of $171.38.
MARA shares were trading at $24.64 per share on Friday afternoon, down $0.62 (-2.45%). Year-to-date, MARA has gained 136.02%, versus a 18.44% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.
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