What happened
It's every investor's favorite season once again: earnings season. For China-based chipmaker Canaan (CAN +0.86%), today's price action certainly suggests there's a lot for investors to cheer.
The maker of Bitcoin mining machines reported blowout fourth-quarter numbers today, resulting in a surge of more than 14% as of 11:45 a.m. ET.
NASDAQ: CAN
Key Data Points
Today's move comes on the heels of a number of strong days for Canaan over the past week, as investors seemed to be pricing in excellent results. It appears Canaan delivered, and then some, considering today's impressive surge.
Image source: Getty Images.
So what
Canaan's Q4 and full-year numbers took many investors by surprise. Net revenue for the quarter increased by more than 5,700%, with gross profit of $233 million blowing away last year's profit of $1.4 million. For the full year, these numbers were equally impressive. The company reported net revenue of $783 million compared to $70 million for 2020. And net income came in at $314 million, compared to a loss of $34 million the year prior.
Much of this growth was a result of an increase in total computing power sold. The company sold 7.7 million terahashes per second of computing power, up 15% year over year. Additionally, the company's AI segment and other businesses experienced strong growth.
Now what
Canaan's ASIC Bitcoin mining machines are among the first, and most well-known, models out there. For Bitcoin miners, Canaan's products are very important. Of course, Bitcoin price fluctuations can change demand for Canaan's products over time. However, considering the positive momentum we've seen of late in this regard, there's a lot of enthusiasm for this company, considering these numbers.
On a trailing basis, Canaan's valuation of $1.06 billion at the time of writing suggests a price-to-earnings multiple of only 3.4. For value investors out there looking for leveraged exposure to Bitcoin, Canaan certainly provides a compelling investment thesis at these levels.
