Why Silvergate Capital Stock is up again today
For the second consecutive day, the stock of Silvergate Capital ( IF 3.34% ) saw a pronounced lift. Shares of the cryptocurrency-focused next-gen bank rose more than 3% on Wednesday, thanks to not one but two increases in analyst price targets.
This morning, Craig-Hallum tipster George Sutton added $10 to his level for Silvergate shares, setting his new target at $160 per share. In doing so, Sutton maintained his buy recommendation on the stock.
The analyst’s decision comes a day after Silvergate released its latest set of quarterly results. On Tuesday morning, the company released its first-quarter results, in which it revealed consolidated net profit more than doubled year-over-year to nearly $25 million. At $0.79 per share, that far exceeds the average analyst estimate of $0.44 for the period.
Sutton was particularly impressed with the performance of SEN Leverage, Silvergate’s credit line product whose borrowings are secured by Bitcoin ( BTC 0.38% ).
The analyst wrote: “The impressive increase of $500 [million] in SEN Leverage commitments this quarter should demonstrate to investors that SEN Leverage is an important growth driver that is just beginning. We are very happy that SEN Leverage is being used as a cash management solution and not just by traders, which should resonate well with [Bitcoin] heavy companies (crypto-miners in particular).”
Sutton’s bullish hold was reinforced by a larger rise in Silvergate’s price target by a peer. Cannacord GenuityJoseph Vafi also increased his on Wednesday morning, setting the stock at $200 per share, 22% higher than his previous target of $164.
Silvergate is an interesting cryptocurrency side game. As long as it continues to deliver results that beat estimates and continues to grow its cryptocurrency efforts, investors should continue to buy the stock.
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