Last Update 04 Dec 25

SMLR: Shares Will Rise As All Stock Acquisition Drives Bitcoin Treasury Consolidation

Analysts have trimmed their average price target for Semler Scientific by about $15 to roughly $83 per share, citing reduced revenue expectations following updated management guidance and the implications of the recent DOJ settlement. They continue to view the stock as an attractive opportunity in light of the pending all stock acquisition by Strive and consolidation prospects in the corporate bitcoin treasury space.

Analyst Commentary

Recent notes from bullish analysts highlight that, even after the DOJ settlement and updated guidance, Semler Scientific is still viewed as a compelling strategic asset, particularly in the context of its pending all stock acquisition and positioning in the corporate bitcoin treasury ecosystem. At the same time, downward revisions to revenue estimates and price targets underscore lingering execution and regulatory risks that could affect the pace of value realization for shareholders.

Bullish Takeaways

Bullish analysts view the reduced, but still elevated, price targets as reflecting potential upside from the current share price. They see the stock as undervalued relative to its long term earnings and cash flow potential.
The all stock acquisition is described as a potential catalyst for strategic consolidation in the corporate bitcoin treasury space. Bullish analysts believe this could support higher long term growth and margin expansion.
Even with trimmed near term revenue forecasts, bullish analysts argue that the core business remains structurally attractive. They see opportunities for execution driven upside if management can stabilize growth and leverage the combined platform after the merger.
Some bullish analysts note that the market may be overly discounting regulatory and deal related uncertainties. They see this as creating a more favorable risk reward profile if integration proceeds smoothly and growth re accelerates.

Bearish Takeaways

Bearish analysts focus on the downward revisions to 2025 2027 revenue expectations. They warn that slower top line growth could limit valuation multiples and delay a re rating of the shares.
There is concern that the DOJ settlement, while resolving legacy issues, highlights ongoing compliance and reimbursement risks that could pressure margins or require higher ongoing oversight costs.
Bearish analysts also point to execution risk around the all stock acquisition, including the possibility of integration challenges, dilution concerns, and uncertainty around the combined entity's capital allocation strategy.
Some bearish analysts caution that investor enthusiasm for bitcoin linked corporate treasuries could be cyclical, which may introduce additional volatility to Semler's perceived growth profile and valuation over time.

What's in the News

Strive, Inc. agreed to acquire Semler Scientific in an all stock deal valued at approximately $1.4 billion, offering a roughly 210% premium, with Semler shareholders to receive 21.05 Strive Class A shares for each Semler share, subject to shareholder and antitrust approvals (Key Developments).
Semler entered into a settlement agreement with the U.S. Department of Justice and related agencies over alleged False Claims Act violations tied to FloChec and QuantaFlo Medicare billing, agreeing to pay $29.75 million plus interest and implementing a five year corporate integrity agreement, without admitting wrongdoing (Key Developments).
A separate whistleblower lawsuit under the False Claims Act involving Semler, Bard Peripheral Vascular, and UnitedHealth entities continues, with Semler and Bard agreeing to pay a combined $36.95 million while claims against United proceed toward litigation over alleged improper Medicare reimbursement for PAD diagnostics (Key Developments).
Semler issued updated guidance indicating that reduced QuantaFlo usage, including a significant cutback by a major customer representing 44.9% of Q2 2025 revenue, is expected to drive Q4 2025 revenues to at least 50% below Q3 2025 levels (Key Developments).
Chief Financial Officer Renae Cormier resigned effective October 30, 2025, with CEO Dr. Douglas Murphy Chutorian appointed interim CFO and principal accounting officer in addition to his existing role (Key Developments).

Valuation Changes

Fair Value Estimate remains unchanged at approximately 65.67, indicating no revision to the intrinsic value assessment.
The Discount Rate has fallen slightly from about 8.62% to 8.56%, implying a modest reduction in the perceived risk profile.
Revenue Growth is effectively unchanged at around negative 29.67%, reflecting continued expectations for a sharp year over year decline.
Net Profit Margin is effectively unchanged at roughly 91.46%, suggesting stable assumptions for long term profitability.
The Future P/E has edged down slightly from about 128.82x to 128.64x, signaling a marginally lower valuation multiple applied to forward earnings.

Diversification into cardiac disease markets and value-based care tools positions the company for higher recurring revenues and improved long-term margins.
Unique strategy leveraging healthcare cash flow to invest in Bitcoin assets distinguishes its growth model and supports potential value appreciation.
Heavy dependence on volatile Bitcoin and shrinking core healthcare revenues heighten financial risk, while limited diversification and industry disruption threaten future stability and growth.

Catalysts

About Semler Scientific

Provides technology solutions to enhance the clinical effectiveness and efficiency of healthcare providers in the United States.What are the underlying business or industry changes driving this perspective?

Expansion of the health care business into new, high-growth cardiac disease markets via CardioVanta (heart failure, arrhythmia) leverages demographic tailwinds of an aging population and higher chronic disease incidence, which could drive significantly higher revenues and diversify recurring income streams.
Growing adoption of preventative, non-invasive screening tools (including QuantaFlo® and future SaaS-based products) aligns with the healthcare industry's increasing focus on value-based care and early detection, supporting longer-term revenue acceleration and margin improvement.
Strengthened relationships and contracts with Medicare Advantage plans and payors for existing and new devices may improve reimbursement outlook and pricing power, enhancing both gross margins and earnings potential.
Ongoing investment in research, regulatory approvals, and expanded indications for the company's devices positions Semler to capitalize on the expansion of digital health and remote patient monitoring, facilitating entry into telemedicine and at-home care markets, which could broaden the company's addressable market and boost revenues.
The company's unique dual-engine model-generating operational free cash flow from healthcare to acquire appreciating Bitcoin assets with intelligent leverage-creates a differentiated value proposition, supporting potential EPS and net asset value growth as secular adoption of both digital assets and preventative health continue.

Semler Scientific Earnings and Revenue Growth

Semler Scientific Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Semler Scientific's revenue will decrease by 12.5% annually over the next 3 years.
Analysts assume that profit margins will shrink from 86.2% today to 16.7% in 3 years time.
Analysts expect earnings to reach $4.8 million (and earnings per share of $-0.28) by about September 2028, down from $37.0 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 401.0x on those 2028 earnings, up from 11.2x today. This future PE is greater than the current PE for the US Medical Equipment industry at 29.7x.
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 7.9%, as per the Simply Wall St company report.

Semler Scientific Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Heavy reliance on Bitcoin price appreciation and the success of a highly leveraged Bitcoin treasury strategy exposes Semler to significant volatility and downside risk if Bitcoin underperforms, which could materially impact both reported earnings and long-term shareholder equity.
Core healthcare revenues are declining (Q2 2025 revenues down year-over-year) due to reimbursement headwinds like the 2024 CMS rate changes, and decreased device usage at key customers, indicating risk to recurring revenue and cash flow stability required to fund ongoing operations and Bitcoin purchases.
The business is operating at an operating loss ($1.2M for Q2 2025) and is increasingly dependent on dilution through equity issuances or leverage (convertible debt, ATM stock offerings) to maintain liquidity and support its dual strategy, which could compress net margins and dilute per-share value for existing shareholders over time.
The company faces product concentration risk around QuantaFlo and limited geographic diversification, increasing vulnerability to U.S. healthcare regulatory changes, potential reimbursement cuts, or competitive threats, which could further erode earnings and future revenue growth.
Industry disruption from rapid advancements in AI-driven diagnostics, preference for integrated/bundled care platforms, and intensified competition from larger med-tech firms may threaten the relevance and market share of both existing and new healthcare product lines (including the CardioVanta initiative), impairing long-term earnings and valuation potential.

Valuation

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

The analysts have a consensus price target of $85.333 for Semler Scientific 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 $101.0, and the most bearish reporting a price target of just $60.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $28.8 million, earnings will come to $4.8 million, and it would be trading on a PE ratio of 401.0x, assuming you use a discount rate of 7.9%.
Given the current share price of $28.07, the analyst price target of $85.33 is 67.1% higher. Despite analysts expecting the underlying buisness to decline, they seem to believe it's more valuable than what the market thinks.
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.

Cardiac And Digital Health Expansion Will Encounter Bitcoin Risks