What happened

Shares of Riot Platforms (RIOT -2.33%) rose 19.7% in April 2023, according to data from S&P Global Market Intelligence. The Bitcoin (BTC -3.39%) mining specialist essentially amplified the swings in Bitcoin prices until April 25, where a bullish analyst review gave this stock a second wind. Bitcoin prices closed the month just 4.2% higher.

So what

B. Riley analyst Lucas Pipes lifted his price target on Riot Platforms from $8 to $12 per share. The firm reiterated its buy rating on this stock, which means that B. Riley encourages its customers to pick up some shares in the current market environment.

Supporting this analysis, B. Riley expects Bitcoin prices to dip slightly in 2023, followed by a 35% jump next year. If these Bitcoin targets turn out to be accurate, Riot's collection of 7,072 Bitcoin tokens should gain roughly $69 million in market value over the next year and a half.

Now what

Riot Platforms is one of the largest Bitcoin-mining specialists on the market. Its use of renewable energy sources is increasing over time, and the company runs a vertically integrated operation, with direct ownership of mining rigs, data centers, security services, and electrical power systems. The mildly diversified business model comes in handy when Bitcoin prices are running low.

For example, Riot's first-quarter Bitcoin revenues fell 15% year over year, even though its computing power more than doubled. At the same time, the company's data center hosting sales increased by 51%, and engineering services revenues surged from $4.2 million to $65 million. Therefore, Riot's total sales rose by 22%, even though the average price of Bitcoin tokens dropped 45% lower.

So Riot Platforms may be less risk-laden than most Bitcoin miners, but the company and stock are still tightly connected to the health of the cryptocurrency market.

Those considering an investment in this stock should keep a close eye on trends in both the broader cryptocurrency sector and the specific crypto-mining industry, in addition to the company's progress on strategic growth plans and operational effectiveness.