Is There Now An Opportunity In Bitgo Holdings (BTGO) After 41% Year To Date Share Price Fall

• If you are trying to figure out whether Bitgo Holdings at around US$10.87 is a bargain or a value trap, starting with a clear view of what the current price reflects can help you frame the opportunity and the risks.
• The stock has seen a 1.4% decline over the last 7 days and a 41.2% decline year to date, which can change how the market views its growth potential and risk profile.
• Recent coverage around Bitgo Holdings has focused on its role in digital asset custody and broader crypto market sentiment, which often moves investor attention toward companies tied to that space. These themes provide important context for the share price moves you are seeing on the screen today.
• On our framework, Bitgo Holdings records a valuation score of 3 out of 6. The rest of this article will walk through what different valuation approaches say about that score, before finishing with a way to think about value that many investors find more useful than any single model.

Bitgo Holdings delivered 0.0% returns over the last year. See how this stacks up to the rest of the Capital Markets industry.

Approach 1: Bitgo Holdings Excess Returns Analysis

The Excess Returns model looks at how much profit a company is expected to generate above the return that equity investors require, and then sums those excess profits into a per share value today.

For Bitgo Holdings, the model starts with a Book Value of $3.36 per share and a Stable EPS of $1.29 per share, based on the median return on equity from the past 5 years. The Average Return on Equity is 44.26%, compared with a Cost of Equity of $0.25 per share. That gap gives an Excess Return of $1.04 per share, which is what the model treats as value created over and above investors’ required return.

The Stable Book Value input of $2.91 per share, sourced from the median book value over the past 5 years, is used to project how long Bitgo Holdings can keep generating these excess returns. Aggregating those projected excess profits leads to an estimated intrinsic value of about $23.49 per share.

Compared with a current share price of around $10.87, the Excess Returns model implies the stock is 53.7% undervalued.

Result: UNDERVALUED

Our Excess Returns analysis suggests Bitgo Holdings is undervalued by 53.7%. Track this in your watchlist or portfolio, or discover 56 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Bitgo Holdings.

Approach 2: Bitgo Holdings Price vs Earnings

For a profitable company, the P/E ratio is a useful way to think about value because it links what you pay directly to the earnings the business is already generating. It gives you a quick sense of how many dollars the market is willing to pay for each dollar of current earnings.

What counts as a "normal" P/E depends a lot on how investors see the company’s growth potential and risk. Higher expected growth and lower perceived risk tend to support a higher multiple, while lower growth and higher risk usually point to a lower, more conservative range.

Bitgo Holdings currently trades on a P/E of 22.01x. That sits slightly below the Capital Markets industry average of about 23.10x, and above the peer group average of 16.84x. Simply Wall St’s Fair Ratio is a proprietary estimate of what P/E might be reasonable for Bitgo Holdings after factoring in its earnings profile, industry, profit margins, market cap and company specific risks. This tailored Fair Ratio approach aims to improve on simple peer or industry comparisons, which can miss these company level differences.

Comparing Bitgo Holdings actual P/E of 22.01x with its Fair Ratio indicates the shares are ABOUT RIGHT on this measure.

Result: ABOUT RIGHT

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Upgrade Your Decision Making: Choose your Bitgo Holdings Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, which are simply your story about a company tied directly to your view of its fair value and your expectations for future revenue, earnings and margins.

On Simply Wall St’s Community page, millions of investors use Narratives to link what they believe about a company’s business, risks and opportunities to a clear financial forecast. That forecast then flows through to a Fair Value they can compare with today’s share price.

That comparison, Fair Value versus Price, gives you a straightforward trigger for your own decisions about when a stock might be worth buying, holding or selling. Because Narratives update automatically when new information such as news or earnings is added, your story and numbers stay aligned without extra effort.

For Bitgo Holdings, one investor might build a Narrative that supports a much higher fair value than the current price, while another could use more conservative assumptions and arrive at a fair value that sits well below where the shares trade today.

Do you think there's more to the story for Bitgo Holdings? Head over to our Community to see what others are saying!

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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