What happened
For the second day in a row, the stock of Silvergate Capital (SI 2.50%) saw a pronounced lift. Shares of the next-generation bank with the tight focus on cryptocurrencies rose by over 3% on Wednesday, thanks to not one but two analyst price-target raises.
So what
This morning, Craig-Hallum prognosticator George Sutton added $10 to his level for Silvergate stock, placing its new target at $160 per share. In doing so, Sutton maintained his buy recommendation on the shares.
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The analyst's move comes a day after Silvergate released its latest set of quarterly earnings. Tuesday morning, the company published its first-quarter results, in which it revealed that consolidated net income more than doubled on a year-over-year basis to nearly $25 million. At $0.79 per share, that far exceeded the average analyst estimate of $0.44 for the period.
Sutton was particularly wowed by the performance of SEN Leverage, Silvergate's credit-line product whose borrowings are collateralized by Bitcoin (BTC -0.59%).
The analyst wrote: "The impressive incremental $500 [million] in SEN Leverage commitments this quarter should demonstrate to investors that SEN Leverage is a significant growth vehicle that is just beginning. We are most excited that SEN Leverage is finding use as a treasury management solution and not just by traders, which should resonate well with [Bitcoin] heavy companies (crypto miners in particular)."
Now what
Sutton's bullish take was bolstered by a heavier Silvergate price-target lift from a peer. Cannacord Genuity's Joseph Vafi also increased his on Wednesday morning, pegging the stock as being worth $200 per share, 22% higher than his previous $164 target.
Silvergate is an interesting sideways play on cryptocurrencies. As long as it keeps producing estimate-trouncing results and keeps growing its cryptocurrency-linked efforts, investors should continue to buy the stock.
