Bitcoin Treasury And Global Longevity Demand Will Drive Future Health Platform Expansion

Catalysts

About Prenetics Global

Prenetics Global is a consumer health company focused on building IM8, a fast-scaling, science-backed health and longevity brand with a data-driven direct-to-consumer model.

What are the underlying business or industry changes driving this perspective?

• Rapid global adoption of proactive health and longevity solutions, evidenced by IM8 reaching a projected $120 million annual recurring revenue run rate within roughly a year and targeting $300 million by the end of 2026, can drive sustained top line acceleration and operating leverage as scale increases.
• Shift toward digital direct-to-consumer engagement with high data visibility, reflected in IM8's 80 percent subscription rate, rising average order value to $150 and sub four month payback period, supports efficient marketing, lower customer acquisition costs and expanding net margins over time.
• Expansion of the global supplements and wellness market toward premium, science-backed products, alongside IM8's early category leadership built on a small SKU base and a strong Scientific Advisory Board, creates room for product line extensions that can grow revenue per customer and gross profit dollars.
• Ongoing international diversification, with more than half of revenue already from outside the U.S. across dozens of countries, positions Prenetics to capture a larger share of a projected $700 billion global market and smooth revenue volatility while improving earnings resilience.
• Disciplined capital allocation, including divestment of noncore assets, zero debt, more than $120 million of liquidity and a Bitcoin treasury strategy, provides flexibility to prioritize high return growth investments in IM8, which can accelerate revenue growth while supporting a faster path to positive EBITDA and earnings.

Assumptions

How have these above catalysts been quantified?

• Analysts are assuming Prenetics Global's revenue will grow by 95.3% annually over the next 3 years.
• Analysts assume that profit margins will increase from -62.2% today to 34.2% in 3 years time.
• Analysts expect earnings to reach $196.4 million (and earnings per share of $9.93) by about December 2028, up from $-47.9 million today.
• In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 3.3x on those 2028 earnings, up from -5.2x today. This future PE is lower than the current PE for the US Healthcare industry at 23.7x.
• Analysts expect the number of shares outstanding to grow by 6.61% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.34%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• The global supplements and longevity market, while large, is highly crowded with low switching costs. IM8 is still built on essentially one hero product, so any slowdown in category growth or loss of brand momentum could cap customer acquisition and repeat purchases, limiting revenue growth and delaying the path to scale earnings.
• The strategy to prioritize rapid expansion over near term profitability means rising marketing and international launch spend could outrun efficiency gains from a 3.9 month payback period. This risk may increase as the company enters more expensive or less familiar markets, which could pressure net margins and push sustainable positive earnings further out.
• The heavy reliance on a direct to consumer, digitally driven model exposes IM8 to long term risks from changes in digital advertising costs, data privacy rules and platform algorithms. Any of these factors could materially increase customer acquisition costs or reduce targeting precision, hurting revenue growth and compressing gross and operating margins.
• The Bitcoin treasury and dual engine health and wealth framework ties part of shareholder value and liquidity to a highly volatile asset. A prolonged downturn or regulatory clampdown on crypto markets could erode balance sheet strength, constrain growth investments and increase downside risk for future earnings.
• The ambitious targets to reach $300 million in annual recurring revenue by 2026 and $1 billion by 2030 assume continued execution, favorable macro conditions and strong consumer spending on premium wellness. Any economic slowdown, regulatory scrutiny of health claims or failure to replicate early unit economics at scale could result in lower than expected revenue, weaker net margins and materially below forecast earnings over time.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The analysts have a consensus price target of $31.0 for Prenetics Global based on their expectations of its future earnings growth, profit margins and other risk factors.
  
• In order for you to agree with the analysts, you'd need to believe that by 2028, revenues will be $574.3 million, earnings will come to $196.4 million, and it would be trading on a PE ratio of 3.3x, assuming you use a discount rate of 7.3%.
  
• Given the current share price of $14.86, the analyst price target of $31.0 is 52.1% 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.