Global Expansion And Strong Partnerships Will Advance Blockchain Adoption

Key Takeaways

• Expansion into regulated global markets and strengthened institutional partnerships position the company for sustained growth and higher long-term revenue potential.
  
• Innovative digital asset product launches and ongoing regulatory successes drive increased institutional trust, rising fee income, and improved long-term profitability.
  
• Heavy dependence on volatile crypto markets, regulatory challenges, and rising competition threaten core revenues, international expansion, and long-term profitability.

Catalysts

A technology company, develops exchange traded products that synthetically track the value of a single DeFi protocol or a basket of protocols in Canada.

• The ongoing global expansion into new regulated markets (Africa, Asia, Middle East, LatAm) positions DeFi Technologies to capture the accelerating worldwide shift toward blockchain and digital asset adoption, expanding its addressable market and supporting long-term revenue growth.
  
• Deepening partnerships and product integration with major global banks and traditional financial institutions for purposes such as UCITS funds and structured products are driving new institutional capital inflows, paving the way for higher AUM, increased fee income, and longer-term earnings escalation.
  
• The rapid launch and scaling of new digital asset ETPs, especially first-mover and niche products, enable the company to monetize rising demand for diversified and innovative exposure to altcoins and tokenized assets, supporting growth in both transaction-based revenues and management/staking fee yields.
  
• The company's active pipeline of DeFi Alpha trades-expected to accelerate in value due to increasing altcoin prices and expanding opportunity set-adds a significant, growing contribution to revenues and net income as markets broaden and mature.
  
• Successful regulatory progress in multiple jurisdictions and a vertically integrated product & custody platform enhance credibility, reduce operational friction, and foster greater institutional trust and adoption, ultimately supporting improved net margins and sustainable long-term profitability.

DeFi Technologies Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming DeFi Technologies's revenue will grow by 62.2% annually over the next 3 years.
• Analysts assume that profit margins will increase from 25.7% today to 81.2% in 3 years time.
• Analysts expect earnings to reach $262.8 million (and earnings per share of $0.48) by about August 2028, up from $19.4 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 10.7x on those 2028 earnings, down from 37.5x today. This future PE is lower than the current PE for the CA Capital Markets industry at 12.7x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.12%, as per the Simply Wall St company report.

DeFi Technologies Future Earnings Per Share Growth

Risks

• DeFi Technologies' revenue is highly dependent on volatile cryptocurrency market conditions and the performance of alt coins; a downturn or extended bear market-marked by declining asset prices or shifts in AUM composition toward lower-fee assets like Bitcoin-could significantly reduce core revenue streams such as staking, lending, and management fees, thus impacting both revenue and net margins.
  
• The company's optimistic revenue and EBITDA forecasts rely heavily on DeFi Alpha trades-opportunistic and unpredictable deal executions that are difficult to model or guarantee; any delays, slippage into future periods, or inability to complete a sufficient proportion of these trades could create substantial revenue and earnings shortfalls compared to guidance.
  
• Ongoing expansion into new geographies (Africa, Asia, Latin America, Middle East) is subject to lengthy, uncertain regulatory approval processes and varying local requirements; regulatory changes, setbacks, or inability to secure necessary licenses could hinder international growth, restrict addressable market size, and impede long-term revenue growth.
  
• DeFi Technologies' competitive position as a first mover and issuer of niche ETPs could erode if larger financial institutions or new entrants accelerate blockchain integration, introduce similar structured products, or capture institutional relationships; such industry consolidation or commoditization would likely lead to fee compression, diminished AUM inflows, and pressured net margins.
  
• Increasing global regulatory scrutiny, security concerns around DeFi and digital asset protocols, and occasional unclear market structure (such as unresolved share discrepancies and dual listings) could raise compliance costs, limit institutional participation, reduce user trust, and expose DeFi Technologies to operational or legal risks, with negative impacts on revenue stability and long-term profitability.

Valuation

• The analysts have a consensus price target of CA$7.8 for DeFi Technologies based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CA$9.0, and the most bearish reporting a price target of just CA$7.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $323.5 million, earnings will come to $262.8 million, and it would be trading on a PE ratio of 10.7x, assuming you use a discount rate of 7.1%.
  
• Given the current share price of CA$3.05, the analyst price target of CA$7.8 is 60.9% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.