Today’s episode - Growth

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DeFi Technologies (U.S.: DEFTF) has reported its strongest financial quarter with record revenues of USD$98.0 million and USD$94.4 million for the three and six months ending June 30, 2024, and a net income of USD$66.5 million and USD$53.2 million for the same period.

Furthermore, DeFi Technologies has partnered with Professional Capital Management to introduce innovative ETF products in the U.S. market. The partnership aims to leverage DeFi's expertise in digital asset ETPs and tap into the growing ETF sector, to meet the evolving needs of U.S. investors. This collaboration brings together Valour Inc.'s experience in creating pioneering ETPs and Professional Capital Management's proven track record in building profitable companies and influencing the media.

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Have you ever wished you'd invested in Apple or Amazon before they skyrocketed? The crypto world is still young, and similar opportunities exist.

DeFi Technologies, a financial powerhouse, could be the next big thing.

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https://defi.tech/ - CBOE: DEFI | OTC: DEFTF

DeFi Technologies: A Deep Dive into Valuation and Growth Potential

DeFi Technologies Inc. (OTC: DEFTF; NEO: DEFI) has garnered significant attention in the financial and cryptocurrency sectors due to its robust Q2 2024 results and promising prospects. A crucial aspect of understanding DEFTF's potential is its valuation, which Singular Research has meticulously analyzed.

Valuation Methodology

Singular Research employs a comprehensive approach to DEFTF's valuation, blending industry peer analysis with a Discounted Cash Flow (DCF) valuation. This dual-pronged strategy aims to provide a well-rounded perspective on the company's fair value.

Industry Peer Analysis

The first facet of the valuation involves comparing DEFTF to its industry peers, utilizing the Price-to-Sales (P/S) multiple. This metric offers insights into how investors value a company's future revenue potential.

DEFTF's P/S ratio 3.2x, derived from the "DEFTF Peer Group Multiples and Price Targets" table, is notably lower than the peer average of 4.3x. This suggests that relative to its projected sales, DEFTF might be undervalued compared to its counterparts.

Furthermore, Singular Research has set a target P/S multiple of 3.7x for DEFTF, indicating a slight premium over its current P/S but maintaining a 20% discount to the peer average. This discount is attributed to DEFTF's smaller size, a common practice in valuation.

Discounted Cash Flow (DCF) Valuation

The second component of Singular Research's valuation is the DCF model, which projects the company's future cash flows and discounts them to present value. This method is grounded in the company's financial projections and growth expectations.

The DCF model utilizes forecasted free cash flow to the firm over the next two years and assumes a 15% growth rate in after-tax EBIT for years three to nine, followed by a 3% stable growth rate thereafter. A weighted average cost of capital (WACC) of approximately 17.3% is applied to discount these future cash flows.

The DCF analysis yields a value of $4.78 (or US$3.49) per share, highlighting the company's intrinsic worth based on its projected financial performance.

Blended Target Price

Singular Research derives a final target price of US$2.75 by weighing the industry peer analysis and DCF valuation equally at 50% each. This blended approach considers the industry's relative valuation and the company's fundamental financial outlook.

Key Takeaways

• DEFTF's valuation, as assessed by Singular Research, suggests potential undervaluation and significant growth prospects.

• The target price of US$2.75, based on a blended valuation methodology, reflects a positive outlook for the company's future.

• Investors interested in cryptocurrency and digital asset investing may find DEFTF attractive due to its strong financial performance, innovative products, and potential for future growth.

• If you think BTC will double in value over the rest of the year) DeFi could trade at close to $50/share by the end of 2024 instead of its current price.

Additional Considerations

The valuation analysis also factors in approximately $41 million worth of venture investments on DEFTF's balance sheet as of Q2:24. These investments could contribute to the company's overall value and growth potential.

Disclaimer

While Singular Research's valuation provides valuable insights, it's important to note that it's based on assumptions and projections that may not materialize precisely. Investors should conduct their due diligence and consider various factors before making investment decisions.

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