Semler Scientific (SMLR) is buying and selling simply above the market worth of its bitcoin holdings, with a market NAV (mNAV) of 1.04, highlighting what dealer Benchmark calls a big valuation disconnect.
Markets, argued analyst Mark Palmer following the corporate’s second quarter earnings yesterday, are giving “just about no credit score for [Semler’s] ample room to make use of ‘clever leverage’ so as to add to its bitcoin holdings.”
Reiterating his purchase score and $101 worth goal — or almost triple the present worth of $35 — Palmer stated there’s a lot “upside optionality” not priced into the inventory.
Not like different bitcoin treasury corporations that lean on aggressive fairness issuance, Semler is embracing a “sluggish cash” strategy, wrote Palmer.
Newly appointed Director of Bitcoin Technique Joe Burnett laid out a plan to scale bitcoin holdings by means of a mixture of working money circulation, low-cost convertible debt, and selective at-the-money (ATM) issuances, all aimed toward preserving shareholder worth and avoiding dilution.
The corporate holds $100M in 4.25% convertible notes due 2030 and, based on administration, has vital headroom to challenge long-term, bitcoin-backed debt to amplify fairness upside, the report famous.
As of July 31, Semler held 5,021 bitcoin with a $475.8 million price foundation and a market worth of $586.2 million, reflecting a $110.4 million unrealized achieve and a 31.3% year-to-date BTC yield.
Administration stays assured in reaching its goal of 10,000 BTC by year-end 2025, and long-term targets of 42,000 BTC by 2026 and 105,000 by 2027.
Benchmark’s $101 goal is predicated on a sum-of-the-parts evaluation incorporating the anticipated future worth of Semler’s bitcoin treasury alongside its healthcare operations, together with the rising CardioVanta unit.
The inventory, buying and selling close to its bitcoin web asset worth (NAV), displays little premium for its strategic flexibility, a niche Benchmark believes will shut as the corporate executes on its capital technique.
Learn extra: Semler Scientific Turns into 14th-Largest Public Bitcoin Holder After $25M BTC Purchase