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Riot Platforms stock (NASDAQ RIOT), a Bitcoin mining firm, is presently priced at about $13 per share, indicating a recent drop of 11% within the last month. This decline is closely aligned with the 3.5% fall in Bitcoin’s price during the same timeframe. This brings up an important question for investors: Is RIOT Platforms a favorable investment at its current valuation of $13? We believe the response is affirmative.
Our determination is grounded in a thorough assessment of the company’s valuation in relation to its recent operational results and financial condition. We analyzed crucial factors, including growth, profitability, financial stability, and resilience in market downturns. Our evaluation reveals that RIOT Platforms maintains a moderate financial status and operational performance.
Although its elevated valuation presents a risky investment, we feel that the prospect for substantial upside renders RIOT Platforms a commendable option for investors who are willing to take on risk. However, if you’re seeking an upside with lower volatility than an individual stock, you might want to consider the High Quality Portfolio. It has consistently outperformed its benchmark—a mix of the S&P 500, Russell, and S&P Midcap indexes—generating returns exceeding 91% since its inception. Additionally, see – SoundHound AI: SOUN Stock To $2?
How Does Riot Platforms’ Valuation Look vs. The S&P 500?
Based on the price you pay for each dollar of sales or profit, RIOT stock appears costly compared to the larger market.
- Riot Platforms has a price-to-sales (P/S) ratio of 7.8 compared to the S&P 500’s 3.2
How Have Riot Platforms’ Revenues Grown Over Recent Years?
Riot Platforms’ Revenues have increased significantly over recent years.
- Riot Platforms has experienced its top line expand at an average rate of 28.6% over the past 3 years (versus an increase of 6.1% for S&P 500)
- Its revenues have increased 93.5% from $280 million to $542 million in the last 12 months (compared to a growth of 5.0% for S&P 500)
- Furthermore, its quarterly revenues rose 118.5% to $153 million in the most recent quarter from $70 million a year prior (versus a 4.8% improvement for S&P 500)
How Profitable Is Riot Platforms?
Riot Platforms’ profit margins are significantly worse than most companies in the Trefis coverage universe.
- Riot Platforms’ Operating Income over the last four quarters was $-375 million, reflecting a very poor Operating Margin of -69.2% (compared to 18.5% for S&P 500)
- For the last four-quarter period, Riot Platforms’ Net Income was $-95 million – indicating a very poor Net Income Margin of -17.5% (compared to 12.7% for S&P 500)
Does Riot Platforms Look Financially Stable?
Riot Platforms’ balance sheet appears strong.
- Riot Platforms’ Debt stood at $870 million at the conclusion of the most recent quarter, while its market capitalization is $4.6 billion (as of 8/20/2025). This yields a strong Debt-to-Equity Ratio of 18.8%(compared to 20.9% for S&P 500). [Note: A low Debt-to-Equity Ratio is preferred]
- Cash (including cash equivalents) constitutes $314 million of the $4.3 billion in Total Assets for Riot Platforms. This results in a moderate Cash-to-Assets Ratio of 7.3% (versus 6.8% for S&P 500)
How Resilient Is RIOT Stock During A Downturn?
RIOT stock has performed significantly worse than the benchmark S&P 500 index during certain recent downturns. As investors remain hopeful for a soft landing of the U.S. economy, how severe could the situation become if another recession occurs? Our dashboard How Low Can Stocks Go During A Market Crash illustrates how key stocks performed during and after the last six market crashes.
Inflation Shock (2022)
- RIOT stock decreased 95.8% from a peak of $77.90 on 17 February 2021 to $3.29 on 28 December 2022, compared to a peak-to-trough decline of 25.4% for the S&P 500
- The stock has not yet recovered to its pre-Crisis peak
- The highest price the stock has achieved since then is 20.29 on 13 July 2023 and it is presently trading at around $12.00
COVID-19 Pandemic (2020)
- RIOT stock fell 97.1% from a high of $38.60 on 19 December 2017 to $1.12 on 31 December 2019, compared to a peak-to-trough decline of 33.9% for the S&P 500
- The stock fully recovered to its pre-Crisis peak by 9 February 2021
Global Financial Crisis (2008)
- RIOT stock plunged 91.4% from a high of $3,587.04 on 26 October 2007 to $309.60 on 20 February 2009, compared to a peak-to-trough decline of 56.8% for the S&P 500
- The stock has not yet recovered to its pre-Crisis high
Putting All The Pieces Together: What It Means For RIOT Stock
In conclusion, Riot Platforms’ performance across the mentioned parameters is summarized below:
- Growth: Very Strong
- Profitability: Very Weak
- Financial Stability: Strong
- Downturn Resilience: Very Weak
- Overall: Moderate
Although Riot Platforms stock has shown moderate performance in the identified areas, a more in-depth analysis paints a more compelling picture.
Justifying Riot’s Valuation
Riot Platforms has a price-to-revenue multiple of 7.8x, which exceeds that of the benchmark index. Nevertheless, this valuation seems warranted when considering the company’s solid average revenue growth of 29% over the past three years. This figure aligns with its average valuation multiple of 7.5x over the previous four years.
Strong Profitability Despite Complexities
When accounting for non-cash expenses such as stock-based compensation and one-time costs (including acquisition-related or non-recurring items), Riot’s profitability appears quite high. Its adjusted EBITDA margin for the last twelve months stands at an impressive 113%. Bear in mind that for cryptocurrency mining companies, reported GAAP profitability is frequently influenced by fluctuations in the fair value of contingent consideration, which can lower the perceived profitability. Additionally, examine Riot Platforms’ EBITDA (GAAP) Comparison.
Beyond the Numbers: Bitcoin’s Influence
Ultimately, the performance of the stock will be linked to the price of Bitcoin. If you expect Bitcoin to increase in value over the long term, Riot serves as an excellent proxy. In this context, a price of $13 per share does not seem to be overpriced, especially when taking into consideration the comprehensive valuation metrics.
Of course, our viewpoint may be incorrect. Investors might be hesitant to pay 7-8 times revenue for a Bitcoin proxy, especially considering the stock’s history of declining over 90% during previous economic downturns. However, for a risk-tolerant investor looking at a horizon of 3-5 years, we consider Riot a solid buy. This perspective is bolstered by the average analyst price target of over $17, indicating a potential upside of nearly 40%.
While RIOT stock seems promising, investing in a single stock can carry risks. Conversely, the Trefis High Quality (HQ) Portfolio, which comprises 30 stocks, has consistently outperformed its benchmark that includes all three indices—the S&P 500, S&P mid-cap, and Russell 2000. What is the reason? As a collective, HQ Portfolio stocks provided superior returns with reduced risk compared to the benchmark index; less of a volatile experience, as demonstrated by HQ Portfolio performance metrics.
