NILE Stock Is Trending Again, Why This Time May Be Different
BitNile Holdings (NYSE: NILE) is topping social media charts after releasing its 2021 earnings yesterday. Investors raced to buy NILE stock with impressive top and bottom-line growth, pushing it up over 15% intraday.
The company is best known for its bitcoin mining operations. But, after a series of acquisitions, BitNile is positioning itself in several high potential industries such as defense and EV charging. Although the earnings excitement lifted NILE stock, share prices are down another 14% today.
With traders calling it a high-potential penny stock, is now the time to buy? Keep reading to learn more about BitNile and what to expect from NILE stock going forward. Then, at the end, find out why NILE stock is due for a rally.
What Does BitNile Do?
BitNile mainly operates as a holding company, generating revenue through its owned divisions. Formerly known as Ault Global Holdings, the business diversifies its holdings into high growth industries.
For example, NILE stock reports earnings in three segments:
- Ault Alliance: Includes BitNile’s crypto mining business and commercial lending and trading services.
- Gresham Worldwide (GWW): Provides energy and power services to defense, rail, medical industries and more.
- TurnOnGreen (TOGI): The company focuses on electronic and EV charging solutions.
Yet this only scratches the surface of what BitNile is planning. Nile stock focuses on increasing shareholder value while pursuing undervalued opportunities.
Within each segment are various businesses that Bitnile either owns or has an interest in. For example, under GWW, BitNile owns Gresham Power Electronics (power solutions), Relec Electronics (power & display) and Enertec Systems (electronic solutions). While the company also has a 56% stake in Microphase, an advanced radio wave developer for defense.
Ault Alliance includes the company’s investment and loan businesses. But, minority stakes in companies such as Mullen Technologies (Nasdaq: MULN) and Alzamend Neuro (Nasdaq: ALZN) have the potential for significant returns in the long run. Lastly, TurnOnGreen is a standalone business building next-gen EV charging solutions and products.
Why NILE Stock Is Trending
The company’s earnings release yesterday lifted Nile stock after hitting an all-time low of $0.50 in mid-March.
The growth caught investors by surprise as word spread throughout social media sites like a wildfire. NILE stock price jumped on heavy trading volume as a result.
Below you can find a few highlights from the report investors are talking about.
- Revenue grew 120% to $52.2 million compared to $23.9 million last year.
- Net Loss shrunk from $32.7 million in 2020 to $24.2 million in 2021.
- Cash totaling $15.9 million, securities of $40 million and cryptocurrency of $2.2 million.
While the results are impressive, positive comments from the CEO and CFO about the future are attracting even more attention. Founder and Executive Chairman Milton “Todd” Ault III says we expect to “achieve positive cash flow from operations” and “triple our top-line results in 2022.”
With a clearer picture of the company’s value, investors are liking what they hear. If the company can achieve these goals, NILE stock may be undervalued at these levels. With this in mind, a strong cash position and growing top line will be enough to fund the plans.
The Case for Buying or Selling BitNile
Despite the company’s growth, the market is not rewarding them so far. Yet many growth stocks are down with market risk high.
Investors are on edge between interest rates rising, soaring inflation, and the war in Ukraine. However, this may be a chance to buy a penny stock for less than $1 with explosive growth potential. Here’s why.
The case for buying NILE stock: With volume picking up significantly in the past month and NILE stock down 54% YTD, it can suggest higher investor interest. Since share prices are down considerably, people are not likely to sell in massive amounts. Especially given the company’s updates and guidance going forward.
Moreover, short interest is on the rise again. According to recent data, the short percent is over 11% after a 26% increase. If BitNile achieves the progress it expects, it can spark a rally. But this time may be different, with solid progress to back it up.
The case for selling NILE stock: Although the results are admirable, much of the top-line growth came from restarting mining ops and increased investment activity. Will they be able to achieve the big growth expectations they are projecting?
If they fail to do so, further pressure on NILE stock is likely. On top of this, crypto volatility is not for everyone. BitNile’s profits will likely fluctuate along with crypto and other investment prices.
NILE Stock Ready for a Rally?
Currently, most of the attention around BitNile is coming from retail traders tossing around ideas on social media. But, with little media coverage, it may present a buying opportunity.
Furthermore, volume is picking up significantly in the past month. For most of 2022, NILE stock exchanged around 1 million during a trading day, give or take. As more information regarding the company becomes available, you can see a rise in volume.
- March 14: Volume starts picking up, reaching 7 million, after announcing a new crypto mining division.
- March 17: More investors are noticing NILE stock after a report claiming that over two Bitcoin (BTC) a day will be capable at the Michigan Data Center at the end of March.
- On March 21: After creating an EV charging and power solutions company (TurnOnGreen), over 200 million shares are exchanging hands.
- And on April 18: Then, 2021 earnings results sparked investor interest again with over 126 million in volume.
As you can see, BitNile is making massive moves, and some investors are starting to pay attention. Meanwhile, NILE stock is down close to 23% during this time. Is BitNile worth almost a quarter less after these big announcements?
At the same time, growth stocks are down, with the iShares Russell 2000 Growth ETF (NYSE: IWO) falling 4% this month. In particular small-cap stocks are leading the fallout.
Is NILE Stock a Hidden Gem?
Investing in penny stocks carries an extra risk with rapid price changes and never-ending downtrends. But there is also the chance of finding a hidden gem amongst the madness.
For NILE stock, this may be the case. For one thing, the company is meeting its goals so far while transitioning the company for future success. With this in mind, BitNile expects growth to continue this year with revenue tripling.
With NILE stock already down over 70% in the past year, will we see a trend reversal? Share prices are falling again today, so NILE stock still looks to be stuck in a downtrend.
But, with so many growing units, one big catalyst will be enough to break the trend. Until then, look for more clarity during BitNile’s second earnings release.
About Pete Johnson
Pete Johnson is an experienced financial writer and content creator who specializes in equity research and derivatives. He has over ten years of personal investing experience. Digging through 10-K forms and finding hidden gems is his favorite pastime. When Pete isn’t researching stocks or writing, you can find him enjoying the outdoors or working up a sweat exercising.