Digital Assets And Bitcoin Mining Will Unlock Future Value

Published
20 Apr 25
Updated
16 Aug 25
AnalystConsensusTarget's Fair Value
US$4.75
48.6% undervalued intrinsic discount
16 Aug
US$2.44
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1Y
-18.7%
7D
10.9%

Author's Valuation

US$4.8

48.6% undervalued intrinsic discount

AnalystConsensusTarget Fair Value

Last Update16 Aug 25
Fair value Increased 5.56%

The consensus price target for LM Funding America has been revised upward to $4.75, primarily reflecting stronger revenue growth expectations and a notable decline in forward P/E, supporting a higher fair valuation.


What's in the News


  • Reported net bitcoin mined of 5.9 in July.
  • Reported net bitcoin mined of 5.5 in June.
  • Reported net bitcoin mined of 6.3 in May.

Valuation Changes


Summary of Valuation Changes for LM Funding America

  • The Consensus Analyst Price Target has risen from $4.50 to $4.75.
  • The Consensus Revenue Growth forecasts for LM Funding America has significantly risen from 17.3% per annum to 33.8% per annum.
  • The Future P/E for LM Funding America has significantly fallen from 21.04x to 17.54x.

Key Takeaways

  • Strategic moves into digital assets and operational upgrades position the company for strong revenue growth and improved margins amid industry shifts.
  • A diversified, integrated business model enhances earnings stability and supports long-term value growth despite cryptocurrency market volatility.
  • Heavy exposure to Bitcoin volatility, high expansion costs, liquidity concerns, and competitive threats place pressure on sustainability and future profitability.

Catalysts

About LM Funding America
    Operates as a cryptocurrency mining and specialty finance company.
What are the underlying business or industry changes driving this perspective?
  • Expansion into digital assets and increased Bitcoin mining capacity-driven by the Mississippi acquisition and Oklahoma immersion deployment-positions LM Funding to capture growth from the ongoing shift to digital and automated financial ecosystems, likely boosting future revenue and supporting long-term topline growth potential.
  • Enhanced operational efficiency from software upgrades, lower power costs, and fleet optimization (including immersion cooling technology) is projected to improve mining margins and reduce per-unit costs, which should directly increase future net margins and profitability.
  • The company's integrated approach-owning mining capacity, optimizing power usage, and selling excess energy back to the grid-provides diversified and resilient revenue streams, increasing overall earnings stability despite underlying crypto volatility.
  • Growing institutional and investor demand for alternative assets, particularly digital assets like Bitcoin, supports the firm's Bitcoin treasury accumulation strategy, which is expected to meaningfully lift book value and, over time, earnings through price appreciation and increased asset holdings.
  • Disciplined capital allocation, including fully funded acquisitions and the potential for further opportunistic M&A in attractive power markets, is designed to maximize ROI and drive earnings per share growth, further underpinned by the positive demographic trends in housing associations that expand the firm's addressable market over the long run.

LM Funding America Earnings and Revenue Growth

LM Funding America Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?
  • Analysts are assuming LM Funding America's revenue will grow by 17.3% annually over the next 3 years.
  • Analysts are not forecasting that LM Funding America will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate LM Funding America's profit margin will increase from -267.1% to the average US Software industry of 13.3% in 3 years.
  • If LM Funding America's profit margin were to converge on the industry average, you could expect earnings to reach $1.7 million (and earnings per share of $0.29) by about August 2028, up from $-21.4 million today. The analysts are largely in agreement about this estimate.
  • In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 21.0x on those 2028 earnings, up from -0.6x today. This future PE is lower than the current PE for the US Software industry at 36.5x.
  • 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 10.35%, as per the Simply Wall St company report.

LM Funding America Future Earnings Per Share Growth

LM Funding America Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?
  • Heavy dependence on Bitcoin price exposes LM Funding America to significant earnings volatility; a prolonged downturn in crypto markets or a major decline in Bitcoin could reduce both revenue and net margins, and also result in asset writedowns on their substantial Bitcoin holdings.
  • The company's strategy to expand by acquiring and operating new mining sites entails high capital and operational costs, and if Bitcoin mining economics deteriorate (e.g., through halving events, rising network difficulty, or persistently high energy prices), the anticipated returns could fall short, negatively impacting earnings and margins.
  • With only $400,000 in cash on the balance sheet and ongoing requirements for miner purchases and infrastructure upgrades, the company faces liquidity risk; if operational cash flow fails to cover expansion or unforeseen expenses, LM Funding America may need to dilute shares or take on expensive debt, impacting both net margins and shareholder value.
  • Industry consolidation and rapid technological improvements in mining hardware may leave LM Funding America at a competitive disadvantage compared to larger, more diversified miners, potentially reducing its market share and suppressing long-term revenue growth.
  • Heavy reliance on energy sales and curtailment revenue as short-term margin enhancers is unsustainable, especially as these revenues are expected to decline with seasonal changes and operational shifts; this could result in reduced gross and net margins if core Bitcoin production fails to adequately compensate.

Valuation

How have all the factors above been brought together to estimate a fair value?
  • The analysts have a consensus price target of $4.5 for LM Funding America based on their expectations of its future earnings growth, profit margins and other risk factors.
  • In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $13.0 million, earnings will come to $1.7 million, and it would be trading on a PE ratio of 21.0x, assuming you use a discount rate of 10.3%.
  • Given the current share price of $2.41, the analyst price target of $4.5 is 46.4% 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.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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