Galaxy Digital beats earnings estimates as analysts debate valuation
Galaxy Digital reported third-quarter earnings of 80 cents per share, far exceeding expectations, and stated its crypto business was profitable for the first time since the bear market. Analysts are divided on the stock's value, with some targeting $45 while others cut estimates due to financing concerns.
Galaxy Digital reported third-quarter earnings of 80 cents per share, significantly beating the expected 22 cents. The company’s market capitalization stands at approximately $6.5 billion, while its balance sheet holds $6.6 billion in cash, stablecoins, U.S. treasuries, and digital assets. The crypto side of the business was profitable in the quarter, a first since the bear market, with fourth-quarter numbers already running 10% ahead of the third quarter.
Analysts Kyle Reedhead and Martin argue the stock is undervalued, setting price targets between $30 and $45 compared to the current price of $17. They contend that Wall Street fails to model crypto bull market cycles and is overly concerned about the company’s partnership with CoreWeave. The company’s AI business includes Helios, a former Bitcoin miner converted into a data center leasing facility, with CoreWeave as the first tenant. Management indicated they turned down summer offers to pursue a larger deal with a tier-one hyperscaler and expects $800 billion to $850 billion in annual recurring revenue from its data center business by the end of next year. Conversely, analysts at other firms have cut targets to $20 to $24, citing CoreWeave financing concerns.