Last Update 14 Dec 25

DEFI: Execution Will Improve As Delays Ease And Shares Recover

Analysts cut their price target on DeFi Technologies by half, to approximately $2.50 from about $5.00. They cited project delays and a slightly higher perceived risk profile that modestly raises the discount rate and future valuation multiple in their models.

Analyst Commentary

Analysts are recalibrating their expectations for DeFi Technologies, reflecting both execution risk around product rollouts and a belief that the long term growth story remains intact. While the reduced price target signals a cooler outlook on near term performance, the maintained positive rating indicates continued confidence in the company’s strategic direction.

Bullish Takeaways

Bullish analysts maintain a positive rating even after the price target cut. This suggests they still see meaningful upside from current levels relative to revised expectations.
The DeFi Alpha delays are viewed as timing related rather than structural, with the potential for revenue and user growth to re accelerate once the product is fully launched.
Updated models continue to assume a solid growth trajectory in the core business, indicating conviction that demand for DeFi infrastructure and related services will expand over the medium term.
Despite a lower valuation multiple, bullish analysts highlight that the company’s strategic positioning in the DeFi ecosystem could support multiple expansion if execution improves.

Bearish Takeaways

Bearish analysts see the DeFi Alpha delays as a sign of execution risk. This prompts them to reduce near term revenue forecasts and cut the price target accordingly.
The higher perceived risk profile leads to an increased discount rate in valuation models, which compresses the justified equity value even if long term growth assumptions are unchanged.
Repeated timeline slippage raises concerns that the company may struggle to convert its product pipeline into predictable, scalable cash flows, limiting investor willingness to pay premium multiples.
With the outlook lowered following the Q3 update, cautious analysts warn that any further setbacks on key product milestones could trigger additional estimate and valuation resets.

What's in the News

Class action lawsuit filed alleging DeFi Technologies misled investors on the competitiveness and execution of its DeFi arbitrage strategy and 2025 revenue outlook, following a 20% Q3 revenue decline and sharp guidance cut that coincided with the CEO transitioning to an advisory role (Key Developments).
Revenue guidance for 2025 reduced nearly in half to approximately $116.6 million, with management citing delays in executing DeFi Alpha arbitrage opportunities amid increased competition and muted digital asset price volatility, despite a bolstered balance sheet from recent equity financing (Key Developments).
CEO transition under way, with co founder Johan Wattenström appointed to lead DeFi Technologies as Olivier Roussy Newton steps down to become strategic advisor. This signals a leadership shift as the company navigates execution challenges and new growth initiatives (Key Developments).
Strategic collaboration with Canada Stablecorp to scale QCAD, now approved as Canada’s first compliant CAD stablecoin. This positions DeFi Technologies to launch CAD linked ETPs, yield products, and cross border payment rails integrated with its platform (Key Developments).
Landmark partnership with SovFi to structure principal protected, Bitcoin linked sovereign debt instruments issued via Valour, targeting the multi trillion dollar sovereign debt market with tokenization ready products and post quantum secure settlement through BTQ (Key Developments).

Valuation Changes

Fair Value: Unchanged at CA$5.60 per share, indicating no shift in analysts’ central intrinsic value estimate.
Discount Rate: Risen slightly from 7.20% to approximately 7.23%, reflecting a modest increase in perceived risk.
Revenue Growth: Effectively unchanged at about 50.0% forecast, suggesting stable expectations for top line expansion.
Net Profit Margin: Essentially flat at roughly 74.4%, implying no material revision to long term profitability assumptions.
Future P/E: Increased modestly from about 13.6x to 13.8x, signaling a small upward adjustment in the valuation multiple applied to future earnings.

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

About DeFi Technologies

A technology company, develops exchange traded products that synthetically track the value of a single DeFi protocol or a basket of protocols in Canada.What are the underlying business or industry changes driving this perspective?

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 Earnings and Revenue Growth

DeFi Technologies Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming DeFi Technologies's revenue will grow by 62.4% annually over the next 3 years.
Analysts assume that profit margins will increase from 25.7% today to 83.0% in 3 years time.
Analysts expect earnings to reach $269.6 million (and earnings per share of $0.48) by about September 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 35.7x today. This future PE is greater than the current PE for the CA Capital Markets industry at 10.3x.
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 7.08%, as per the Simply Wall St company report.

DeFi Technologies Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

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

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

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 $324.7 million, earnings will come to $269.6 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$2.82, the analyst price target of CA$7.8 is 63.8% 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.

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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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