Galaxy Digital (NasdaqGS:GLXY): Evaluating Current Valuation After Recent Momentum Shift

Galaxy Digital (NasdaqGS:GLXY) has caught investor attention recently, with its stock shifting direction over the past month. While the headlines may not highlight any single event, there are a few trends worth keeping an eye on.

See our latest analysis for Galaxy Digital.

Momentum for Galaxy Digital has picked up again in 2024, with the stock posting a 45.3% share price return year-to-date and a stellar 47.3% total shareholder return over the last year. While recent volatility has made for a bumpier ride, the long-term performance, including an eye-catching 728% total return over three years, keeps growth potential firmly in the conversation.

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With a powerful rebound and double-digit growth, is Galaxy Digital's recent performance signaling an undervalued opportunity, or has the market already accounted for all of its future prospects? Is there real value left for investors today?

Most Popular Narrative: 43.8% Undervalued

Galaxy Digital’s fair value, as suggested by the most widely followed narrative, lands far above the latest close. This stark valuation gap points to catalysts that bulls believe could set the stock apart in the evolving digital assets and AI infrastructure space.

Improving regulatory clarity and ongoing legal reforms like the GENIUS Act are facilitating the integration of traditional finance with blockchain. This enables Galaxy to launch new products (e.g., stablecoins, funds, tokenized assets) and gain access to larger client pools, which is set to meaningfully increase addressable markets and topline growth.

Read the complete narrative.

Want to know if stunning growth forecasts justify this high price? Behind this narrative is an aggressive roadmap of expansion and network effects that analysts say could upend the industry. What key financial bets are hiding inside the math? Click for the story behind the valuation.

Result: Fair Value of $46.73 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, even with these growth projections, reliance on a major client and tightening profit margins could quickly shift Galaxy Digital’s outlook.

Find out about the key risks to this Galaxy Digital narrative.

Another View: Multiples Point to Elevated Valuation Risk

Looking from a different angle, the market’s price-to-earnings ratio for Galaxy Digital currently stands at a lofty 42.3x. This figure is more than double the US Capital Markets industry average of 23.5x, higher than peers at 19.8x, and nearly five times above its calculated fair ratio of 8.7x. Such a wide gap suggests investors are paying a premium for future growth rather than current profitability. Is the optimism justified, or could sentiment shift if growth expectations cool?

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

Build Your Own Galaxy Digital Narrative

If you want to challenge the popular view or trust your own research, you can dive into the data and shape your perspective in just a few minutes, Do it your way

A great starting point for your Galaxy Digital research is our analysis highlighting 1 key reward and 6 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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