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On Thursday, Compass Point initiated coverage on DeFi Technologies Inc (OTC:DEFTF), bestowing a Buy rating and setting a price target of $5.00. The company, currently valued at $750 million, has seen its stock surge over 315% in the past year, according to InvestingPro data. DeFi Technologies, recognized for issuing exchange-traded products (ETPs) related to digital assets, has been commended for enhancing cryptocurrency accessibility for institutional investors. These ETPs, which provide yields and are listed on international stock exchanges, are part of the company’s strategy to cater to a growing interest in crypto investments. The strategy appears to be working, with revenue growing by 433% in the last twelve months to $38.4 million.
DeFi Technologies leverages assets under management (AUM) to generate revenue, primarily through high-margin staking fees and trading income from the underlying digital assets. The firm’s stock is currently dual-listed on the U.S. OTC Markets as "DEFTF" and in Canada under the ticker "DEFI." InvestingPro analysis reveals 14 additional investment tips for this high-growth company, including detailed insights on its financial health and growth prospects.
Compass Point anticipates that DeFi Technologies’ shares will transition to a Nasdaq listing under the ticker "DEFT" within the second quarter of 2025. The analyst firm expects this move to increase visibility and investor interest in the crypto-focused company, which boasts EBITDA margins exceeding 75%.
According to Compass Point, DeFi Technologies’ stock is trading at six times the firm’s estimated earnings per share (EPS) for 2025. This valuation takes a conservative stance, assuming no significant recovery in cryptocurrency prices. The $5.00 price target is based on a 15-times target EPS multiple, aligning with valuation metrics applied to both crypto industry peers and more traditional asset management stocks.
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