Does American Bitcoin’s Sharp 2025 Share Price Slump Signal a Long Term Opportunity?

• Many investors are asking whether American Bitcoin at around $1.65 is a bargain or a value trap, so here is a breakdown of what the market might be missing.
• The stock has been extremely volatile recently, dropping about 14.9% over the last week and sliding roughly 67.3% over the past month, leaving it down around 74.3% year to date.
• Those sharp moves are coming as crypto related names remain highly sensitive to shifts in risk appetite and sentiment around digital asset regulation, with traders quickly rotating in and out as headlines change. At the same time, ongoing debate about the long term role of Bitcoin in mainstream finance continues to drive large, sentiment driven swings in anything tied to the space.
• Despite that backdrop, American Bitcoin scores a 4/6 valuation check, suggesting the market may be pricing in more pessimism than the fundamentals justify. We will walk through those different valuation angles next, then finish with an additional way to think about what this stock may be worth.

American Bitcoin delivered 0.0% returns over the last year. See how this stacks up to the rest of the Software industry.

Approach 1: American Bitcoin Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting the cash it could generate in the future and discounting those cash flows back to today, using a required rate of return. For American Bitcoin, the starting point is last twelve month Free Cash Flow of about $26.4 million, with analysts and the model assuming very rapid growth in the early years that gradually slows over time.

Based on these assumptions, projected Free Cash Flow is expected to rise to roughly $231.6 million by 2035, with the years beyond the formal analyst horizon extrapolated by Simply Wall St to reflect a maturing business. When all of those future cash flows are discounted back to today under a 2 Stage Free Cash Flow to Equity framework, the intrinsic value comes out at around $2.95 per share.

With the stock trading near $1.65, this implies the shares are about 44.0% below that DCF based estimate, which suggests investors are heavily discounting the company’s ability to deliver on these growth projections.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests American Bitcoin is undervalued by 44.0%. Track this in your watchlist or portfolio, or discover 911 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for American Bitcoin.

Approach 2: American Bitcoin Price vs Earnings

For profitable companies, the price to earnings ratio is a useful yardstick because it directly compares what investors are paying today with the profits the business is already generating. In general, faster growth and lower risk justify a higher PE multiple, while slower or more uncertain earnings typically warrant a lower one.

American Bitcoin currently trades on a PE of about 9.2x, which is far below the broader Software industry average of roughly 32.7x and also well under the peer group average of around 36.0x. On the surface, that kind of discount suggests the market is either skeptical about the durability of current earnings or is building in a significant risk premium for the crypto exposed business model.

Simply Wall St tackles that question with its Fair Ratio, a proprietary estimate of what PE multiple would be reasonable for American Bitcoin given its earnings growth outlook, industry, profit margins, market cap and specific risk factors. This tailored benchmark is more informative than a simple comparison with peers or the sector because it adjusts for how different the company is on those fundamentals. On that basis, American Bitcoin screens as undervalued, with its actual PE sitting below the Fair Ratio that would typically be justified by its profile.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1463 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your American Bitcoin Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of American Bitcoin’s story with the numbers behind it. A Narrative is your personal storyline for a company, where you spell out what you think will happen to its revenue, earnings and profit margins, and then link that to an explicit fair value estimate. On Simply Wall St’s Community page, used by millions of investors, Narratives turn those assumptions into a clear financial forecast and fair value, so you can quickly compare that fair value to today’s share price and decide whether you see American Bitcoin as a buy, hold or sell. Because Narratives update dynamically when new information like earnings releases, regulatory news or crypto market moves arrive, they stay aligned with the latest reality rather than a static snapshot. For example, one American Bitcoin Narrative might assume strong hash rate growth and improving margins that justify a much higher fair value, while another might expect falling Bitcoin prices and rising energy costs that drive a much lower fair value from the same starting price.

Do you think there's more to the story for American Bitcoin? Head over to our Community to see what others are saying!

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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