Greenidge Generation (NASDAQ:GREE) is a newly public Bitcoin mining company now that its reverse merger with Support.com (formerly SPRT symbol) closed on Sept. 14. I wrote before that GREE stock was undervalued when it was around $25. I originally wrote that it was worth at least $57.49. And at $20.67 on Oct. 28, this implies it could more than double from here.

However, now that Bitcoin (CCC:BTC-USD) has moved up, I think the stock is likely worth more than my previous forecast. And I am not the only one who thinks this.

According to TipRanks, there are now two Wall Street analysts who’ve written on the stock in the past three months. That being said, their average target price is $78 per share. That is higher than my estimate and represents a potential upside of nearly 280% from the current price.

So, with all of that in mind, let’s look at this further.

Recent Developments at Greenidge Generation

Recently, Greenidge announced on Oct. 21 in an 8-K filing that it was going to expand its Bitcoin mining operations beyond New York state. This will include six data center sites all around Texas, as well as one large site in Spartanburg, South Carolina.

Moreover, the company significantly increased the number of Bitcoin miners that it now has on order. The problem, though, is that Greenidge did not indicate how much it paid for the new orders of miners, neither did it include any costs for the Texas expansion plans.

Greenidge did indicate that the South Carolina facility purchase was $15 million. But this was also a bit nebulous as it was not clear if that included any servers in the purchase price, since it was bought from a former telecom company.

However, the Texas Development Sites have more than 2,000MW of electrical capacity and include several locations surrounded by abundant wind and solar power generation. This means that Greenidge will have plenty of access to power to run its newly ordered 22,500 Bitcoin servers (“miners”).

Moreover, Greenidge now says that it will have an electrical capacity of over 50MW by 2023. This compares to its existing 45MW of capacity at its sole Bitcoin mining facility in Dresden, NY. So, in effect, the ability of the company to mine Bitcoin has now increased by more than 10 times by the end of 2023.

GREE Stock Count and Cash Flow

As I indicated the problem is we don’t know how to analyze these costs since the company has not indicated the amount of the total investment. In addition, Greenidge has not produced any kind of financial information, including no financial information for the quarter ending Sept. 30. That makes it very difficult to analyze its ongoing potential cash flow.

For example, the company said this about how it was going to afford all these huge costs:

“Greenidge intends to finance its expansion plans with cash on hand, including the proceeds of its recent $55.2 million senior notes offering, as well as operating cash flow. Additional debt and/or equity financing could contribute to further expansion or to the acceleration of the expected timeframe of expansion.”

In addition, the company clarified that it now has, or soon will have 42.2 million shares outstanding after the sale of 3.5 million shares. However, it is not clear to me who bought those 3.5 million shares and what price they paid. That is because I was not aware that the reverse merger included any kind of capital raise, although I could be wrong about that.

Therefore we now know that with 42.2 million shares outstanding and with its recent price at around $20.49, the diluted market capitalization is $864.7 million.

What GREE Stock is Worth

As I pointed out in my last article, the company expects to make $109 million in 2022. However, B. Riley’s analyst now projects that its 2023 EBITDA (earnings before interest, taxes, depreciation, and amortization) will be $226 million.

Without knowing what the company’s balance sheet looks like, and assuming that its debt is only $55.2 million, this gives it an enterprise value (EV) of $919.9 million (i.e., $864.7m +$55.2m debt). Therefore, its EV/EBITDA multiple for 2023 is only 4.1 times.

Assuming a 25% tax rate that equates to a net income of $169.5 million and a price-earnings ratio (P/E) of just 5.1 times (i.e., $864.7m/$169.5). This is basically way too low.

By way of comparison, Marathon Digital Holdings (NASDAQ:MARA) trades for 12.7 times forecast earnings for 2022 and 12.37 times for 2023.

As a result, GREE stock would be worth at least $2.096 billion using this same metric for 2023. That implies an upside of 142.5% over that recent price price. This puts its value today at $49.68 per share (i.e. 2.425 x $20.49).

That is not as high as the B. Riley forecast price of $78, but it still shows that GREE stock is deeply undervalued. Keep in mind that I have not updated my analysis both for the higher Bitcoin price and also for the new number of miners. Therefore it seems best to rely on the B. Riley forecast rather than mine.

On the date of publication, Mark R. Hake did not hold any position directly or indirectly in any of the securities mentioned in the article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guide which you can review here.