Marathon Digital (NASDAQ:MARA) stock had touched highs of $83.45 in November 2021. With a meaningful correction in Bitcoin (BTC-USD), MARA stock has corrected by 68%. It seems to me that the big decline is a good accumulation opportunity.

Since Marathon Digital is a Bitcoin miner, the company’s performance depends on the price trend for Bitcoin. At the beginning of 2022, Goldman Sachs opined that the cryptocurrency will continue to grab market share from gold. Goldman has a long-term target of $100,000 for Bitcoin.

Back in November 2021, JP Morgan (NYSE:JPM) also indicated that Bitcoin price is likely to touch $146,000 in the long-term. I believe that these estimates are realistic considering the point that crypto adoption is still at an early stage.

In December 2021, the number of crypto holders globally were 295 million. Crypto.com expects the number of holders to increase to one billion by December 2022. New investors will look at the top names in the cryptocurrency world for initial exposure. With a limited supply, Bitcoin will benefit from incremental demand.

It also seems that Bitcoin has discounted the rate-hike factor in the recent correction. At the same time, the cryptocurrency market is over $2 trillion in market capitalization. It’s too big to be banned. Regulations might be a potential headwind, but would not be a deterrent for wider crypto adoption.

With a positive long-term outlook for Bitcoin, let’s talk about the growth catalysts for Marathon Digital.

Growth to Accelerate for Marathon Digital

It’s worth noting that Marathon is already on a high-growth trajectory. For third quarter 2021, the company reported revenue growth of 76% on a year-on-year basis to $51.7 million. As of September 2021, the company reported a hashing capacity of 2.7EH/s.

The key point here is that top-line growth will significantly accelerate in the next few quarters. To put things into perspective, Marathon expects hashing capacity to increase to 13.3EH/s by mid-2022. This would imply a five-folds growth in mining capacity.

If we look at specific numbers, Marathon expects to mine 66 Bitcoin per day once the expansion is completed. If the current price of around $45,000 is assumed, the company is positioned for monthly revenue of almost $90 million. This would also imply an annualized revenue potential in excess of $1 billion.

Another point to note is that Marathon expects blended mining cost of $6,235 per Bitcoin. Even if the cryptocurrency trades around current levels, EBITDA margin is likely to be robust. With a positive long-term outlook for Bitcoin, the company is positioned for healthy cash flows.

I want to further add here that Marathon is targeting hashing capacity increase to 23.3EH/s by the beginning of 2023. Therefore, sharp top-line growth is likely to sustain through the next two years.

Strong Financial Position

With aggressive expansion plans, it’s important to look at the company’s financial flexibility.

As of December 2021, Marathon reported cash and equivalents of $623.7 million. Also, considering the digital assets in the balance sheet, the company had a total liquidity buffer of $1.1 billion.

Recently, Marathon has also filed for a $750 million mixed shelf registration. The proceeds can be raised through a mix of common stock, preferred stock and warrants.

With this possible funding raise, Marathon Digital will have a total liquidity buffer of nearly $2 billion. This will support the company’s current expansion plans.

It’s also worth noting that as Bitcoin mining accelerates significantly after mid-2022, the company’s digital assets will swell. This will further boost the financial flexibility.

The Bottom Line

MARA stock trades at very attractive levels considering the growth that’s lined-up for the next 12-18 months. Once Bitcoin starts trending higher, I would not be surprised if MARA stock re-tests previous highs of $83.45. The stock is therefore likely to deliver multi-fold returns from current levels.

The cryptocurrency industry is still at an early growth stage. Given the expected surge in digital assets for the company in the coming quarters, Marathon also seems to be positioned for diversification driven growth.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in any of the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modelling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.