Assessing SharpLink Gaming (SBET) Valuation After A US$170 Million DeFi Treasury Shift

SharpLink Gaming (SBET) recently moved US$170 million of company funds into a custodial DeFi restaking strategy using ConsenSys, Linea, EtherFi, and EigenLayer, signaling a clear shift toward on-chain treasury management.

See our latest analysis for SharpLink Gaming.

The move into custodial DeFi comes after a mixed share price picture, with a 6.60% 1 month share price return, a 32.30% 3 month share price decline, and a 71.57% 1 year total shareholder return. This suggests momentum has recently cooled after a stronger rebound.

If this kind of on chain treasury shift has your attention, it could be a good moment to broaden your search and check out fast growing stocks with high insider ownership.

With revenue growing, net income still in loss territory at about US$1.0 million, and the share price trading at a steep discount to a US$24 analyst target, you have to ask: is this a mispriced DeFi treasury play, or is the market already assuming future growth?

Preferred Price to Book of 0.6x: Is it justified?

On a P/B of 0.6x, SharpLink Gaming is trading well below both analyst valuation work and its peer group, even after a volatile share price stretch.

P/B compares the company’s market value to its book value. This is often a useful reference for asset heavy or early stage, loss making businesses where earnings are not yet a clean signal. In SharpLink Gaming’s case, the combination of a loss of about $1.0 million and an Ether focused treasury means book value and balance sheet strength matter just as much as the income statement.

Simply Wall St’s DCF work flags that the $9.37 share price sits below an estimated future cash flow value of $13.78. The same framework indicates trading at roughly a 32% discount to an internal fair value estimate. Layer that on top of a P/B of 0.6x and the result is a valuation that sits well under what those methods imply, even if analysts do not yet agree tightly on targets.

The peer comparison is stark. Management is working with a P/B of 0.6x compared with a US Hospitality industry average of 2.4x and a peer average of 5x. This suggests the market is pricing SharpLink’s equity at a steep discount to sector balance sheets.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price to Book of 0.6x (UNDERVALUED)

However, you still need to weigh the Ether focused treasury exposure, as well as the continuing net income loss of about US$1.0 million, as possible pressure points.

Find out about the key risks to this SharpLink Gaming narrative.

Another View on Value

So far, the low 0.6x P/B points to SharpLink Gaming looking inexpensive versus peers. Our DCF model also suggests the $9.37 share price is below an estimated $13.78 future cash flow value. If both methods indicate underpricing, is the market overlooking something in the Ether treasury and earnings path?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out SharpLink Gaming for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 865 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

Build Your Own SharpLink Gaming Narrative

If you see the numbers differently, or prefer to test every input yourself, you can build a custom view in minutes with Do it your way.

A great starting point for your SharpLink Gaming research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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