SharpLink Gaming (SBET): Evaluating Valuation Following Major ETH Deployment on Consensys' Linea Network

SharpLink Gaming (SBET) announced plans to deploy $200 million worth of ETH from its corporate treasury onto Linea, a blockchain platform built by Consensys. The initiative reflects its ongoing focus on digital asset innovation and treasury efficiency.

See our latest analysis for SharpLink Gaming.

SharpLink’s news comes at a turning point for the stock. After a volatile stretch that saw a 1-day share price jump of 7.07% but a heavier 30-day decline of 31.93%, shares remain up 48.03% year-to-date, and the 1-year total shareholder return stands at 36.53%. That said, investors are still contending with a deeply negative 3-year total return, hinting that momentum has been uneven but sentiment may be shifting as the company leans into digital asset strategies.

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With shares coming off recent highs but still up dramatically in 2024, the key question for investors is whether SharpLink remains undervalued at current levels or if the company’s future growth is already reflected in the price.

Price-to-Book Ratio of 5.2x: Is it justified?

At a price-to-book ratio of 5.2x, SharpLink Gaming trades at a notable premium compared to both its direct peers and the broader US Hospitality industry. With the stock last closing at $11.96, investors are putting a significant value on its assets.

The price-to-book (P/B) ratio compares a company’s market value to its book value, indicating how much investors are willing to pay for each dollar of net assets. For SharpLink, this number suggests bullish expectations for future growth or an intangible asset premium.

However, this premium is difficult to justify when peers trade at an average of 2.2x and the broader hospitality industry sits at 2.7x. The market currently ascribes much greater value-per-asset than comparable firms, expecting rapid gains or strategic breakthroughs to materialize.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Book Ratio of 5.2x (OVERVALUED)

However, ongoing net losses and heavy reliance on continued revenue growth could quickly undermine the bullish outlook if performance trends do not improve.

Find out about the key risks to this SharpLink Gaming narrative.

Another View: What Does the SWS DCF Model Show?

While the 5.2x price-to-book ratio suggests SharpLink is expensive compared to its peers, our DCF model comes to a different conclusion. Based on future cash flow estimates, the SWS DCF model puts the fair value at $13.74, making the current price 12.9% below that mark. Could the market be missing the company’s long-term potential, or is the premium on assets still too high?

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 SharpLink Gaming 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 870 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 SharpLink Gaming Narrative

If you have your own take on SharpLink or want to dig deeper into the numbers, you can build your perspective using the data tools available to you. It only takes a few minutes to shape your own viewpoint, so why not Do it your way

A great starting point for your SharpLink Gaming research is our analysis highlighting 2 key rewards and 4 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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