SMLR: Shares Will Reflect Upside As $1.4 Billion Acquisition Advances

Analysts have lowered their fair value estimate for Semler Scientific by approximately $10. This change is due to reduced revenue growth projections and updated guidance in light of recent acquisition and settlement developments.

Analyst Commentary

Analyst perspectives on Semler Scientific reflect a mix of optimism and caution in light of recent corporate developments, updated management guidance, and the new acquisition agreement. Their evaluations focus on both the company's valuation potential and execution risks moving forward.

Bullish Takeaways

• Bullish analysts believe the proposed all-stock acquisition deal presents an attractive entry opportunity, viewing current share levels as undervalued relative to longer-term prospects.
• The acquisition is seen as a potential catalyst for further consolidation within the corporate bitcoin treasury space. This could benefit Semler Scientific through increased scale and recognition.
• Despite trimmed price targets, Buy ratings are maintained. Analysts indicate there is still room for upside if the company can effectively execute post-acquisition strategies.
• Some analysts highlight that resolving outstanding legal settlements reduces uncertainty and could help management focus more fully on operational growth initiatives.

Bearish Takeaways

• Bearish analysts express concern about management’s reduced revenue growth guidance and lower estimated earnings for the next several years, which is reflected in reduced price targets.
• The company’s recent settlement of civil claims, although removing a legal overhang, brings attention to prior compliance and operational risks that may continue to impact market perception.
• There is cautious sentiment about the long-term value proposition of the acquisition. The market continues to assess how the combined entity will drive sustainable growth and profitability.
• Execution risks surrounding the integration process post-acquisition could place pressure on both margins and revenue momentum in the coming quarters.

What's in the News

• Strive, Inc. announced a definitive agreement to acquire Semler Scientific for approximately $1.4 billion. Each Semler share will be exchanged for 21.05 Strive Class A shares, representing a 210% premium. The transaction is pending customary approvals and a shareholder vote (M&A Transaction Announcements).
• Semler Scientific entered into a $29.75 million settlement agreement with the U.S. Department of Justice and other parties regarding alleged civil violations of the False Claims Act related to Medicare claims for its medical devices. The company did not admit wrongdoing as part of the settlement (Lawsuits & Legal Issues).
• A major customer representing nearly 45% of second-quarter revenue informed Semler Scientific it will drastically reduce use of the QuantaFlo device. As a result, Semler forecasts at least a 50% revenue drop for the fourth quarter of 2025 (Corporate Guidance - New/Confirmed).
• Renae Cormier resigned as Chief Financial Officer. CEO Dr. Douglas Murphy-Chutorian has been appointed as interim CFO, effective October 30, 2025 (Executive Changes - CFO).
• Shareholders voted to increase authorized common stock from 50 million to 210 million shares at the company’s 2025 AGM. A proposal to authorize new preferred stock was not approved (Changes in Company Bylaws/Rules).

Valuation Changes

• Fair Value Estimate: Lowered from $75.33 to $65.67 per share, reflecting a decline of about $10.
• Discount Rate: Increased from 7.81% to 8.62%, indicating higher perceived risk in future cash flows.
• Revenue Growth: The forecasted revenue decline is marginally less severe, with estimates improving from -30.83% to -29.67%.
• Net Profit Margin: Projected to rise substantially from 40.29% to 91.46%.
• Future P/E Ratio: Reduced sharply from 296.55x to 128.82x, suggesting lower expected valuation multiples moving forward.