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Ark Invest’s recent purchase of Bullish (BLSH) shares, alongside Coinbase and Circle Internet, has put the digital assets firm back on watchlists even as bitcoin and the broader crypto market trend bearish.
See our latest analysis for Bullish.
Ark’s purchase comes after a tough stretch for Bullish, with a 7 day share price return of 8.59%, a 30 day share price return of 13.32% and a 90 day share price return of 33.98% from a last close of $35.66. This points to fading momentum over recent months even as investors reassess crypto related risk.
If this crypto pullback has you thinking more broadly about where to put fresh capital, it could be a good moment to check out fast growing stocks with high insider ownership.
With Bullish shares sitting at a discount of about 43% to an analyst price target of US$51, the market clearly has doubts. Is this cautious stance overdone, or are investors already correctly pricing in the company’s future growth?
On the numbers provided, Bullish trades on a P/S of 27x, which is well above both its peer group at 4.6x and the broader US Capital Markets industry at 4x. That gap stands out given the current share price of $35.66 and the company’s unprofitable status.
The P/S multiple compares the company’s market value with its revenue, which can be useful for loss making businesses where earnings are not yet a guide. For Bullish, the current 27x figure is being applied to revenue of about $198.8 million, at a time when the company is still reporting a net loss of $61.1 million and a negative return on equity of 1.59%.
Analysts expect Bullish’s revenue to grow at 29% per year and earnings to improve, with forecasts pointing to the company becoming profitable within the next 3 years and earnings growing at a very large rate of 112.7% per year. Even so, the present P/S level sits far above both the 4.6x peer average and the 4x industry average. This suggests the market is currently assigning Bullish a far richer revenue multiple than many of its capital markets peers.
See what the numbers say about this price — find out in our valuation breakdown.
Result: Price-to-Sales of 27x (OVERVALUED)
However, you still need to weigh clear pressure points, including recent share price declines over 7 to 90 days and ongoing net losses despite growing revenue.
Find out about the key risks to this Bullish narrative.
If you do not agree with this view, or you would rather rely on your own work, you can create a custom take in just a few minutes with Do it your way.
A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Bullish.
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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.
Companies discussed in this article include BLSH.
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