CoinShares International (OM:CS): Assessing Valuation After a 33% Three-Month Rally

CoinShares International (OM:CS) has attracted attention lately due to a substantial rally, with shares up nearly 33% over the past 3 months. The market’s focus now centers on how sustainable this momentum is given recent performance.

See our latest analysis for CoinShares International.

CoinShares International’s surge over the past three months stands out, especially given its 33.1% share price return in that span and a remarkable 96.1% total shareholder return over the past year. Despite a brief pullback in the last week, momentum over the longer term remains strong and suggests shifting sentiment around the company’s growth prospects and risk profile.

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With shares having soared, the key question is whether CoinShares International remains undervalued at current levels, or if recent growth and future prospects are already fully reflected in its stock price. Is there still a buying opportunity?

Price-to-Earnings of 8x: Is it justified?

CoinShares International’s shares are currently trading at a price-to-earnings (P/E) ratio of 8x, which signals undervaluation compared to peers as well as historical norms for the capital markets sector.

The price-to-earnings ratio measures what investors are willing to pay for each unit of current earnings, making it a widely used indicator for value, especially in fast-changing segments like diversified financials. For a company with substantial recent growth, a low P/E may suggest the market is underappreciating future profit potential.

Compared to the Swedish Capital Markets industry average of 25.6x, CoinShares International’s P/E is significantly lower. Versus our estimated fair price-to-earnings ratio of 17.9x, the current multiple remains well below a level the market could move toward if positive sentiment continues. This strengthens the case for the shares offering attractive value at present.

Explore the SWS fair ratio for CoinShares International

Result: Price-to-Earnings of 8x (UNDERVALUED)

However, short-term price volatility and any slowdown in revenue or profit growth could quickly change investor sentiment regarding CoinShares International’s outlook.

Find out about the key risks to this CoinShares International narrative.

Another View: What Does the SWS DCF Model Show?

While the low price-to-earnings ratio paints a picture of value, our DCF model tells a similar story. According to the SWS DCF model, CoinShares International is still trading well below our estimate of fair value. This increases the case for potential upside. Does this dual undervaluation suggest a genuine opportunity, or are there hidden risks?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out CoinShares International for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 899 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own CoinShares International Narrative

If you’d rather form your own perspective or question the analysis above, you have the tools to build your own narrative in just minutes, and Do it your way.

A great starting point for your CoinShares International research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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