Bit Digital Stock Surges 23% as New White House Crypto Order Drives Valuation Debate

Thinking about whether now is the right time to get in or out of Bit Digital? You are definitely not alone. After a stretch of rollercoaster moves, Bit Digital’s stock has recently caught the attention of a lot more investors. In the past seven days alone, shares have surged by 23.4%, capping off a month where the stock shot up 58.4%. Even if you take a longer view, the gains are still eye-catching, with a one-year return of 35.1% and a three-year climb of over 274%. That kind of run can be hard to ignore. It also raises important questions about risk, sustainability, and whether the current price truly reflects Bit Digital’s value.

What is driving these swings? Much of the recent momentum seems tied to the growing conversation in Washington about crypto in retirement plans. Policy hints, such as the White House looking to expand crypto access in 401(k)s and a fresh report outlining the administration’s stance on digital assets, have changed how investors view the space. Just as important, political uncertainty around regulation continues to inject extra volatility into stocks like Bit Digital. The company tends to thrive or tumble along with shifts in the crypto landscape.

For investors trying to make sense of all this, valuation is key. According to our six-point checklist for undervaluation, Bit Digital passes three out of six, resulting in a value score of 3. This is not bad, but the real question is what those numbers mean for you. Next, we will break down the specifics of how Bit Digital stacks up across the most commonly used valuation approaches, and why looking beyond these standard measures might give you the best edge of all.

Bit Digital delivered 35.1% returns over the last year. See how this stacks up to the rest of the Software industry.

Approach 1: Bit Digital Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's value by forecasting its future cash flows and then discounting them back to today's value. This approach allows investors to judge whether a stock's price reflects its long-term earning potential.

For Bit Digital, the most recent Free Cash Flow (FCF) stands at -$85.5 Million, reflecting a period of negative cash generation. Despite this, analyst projections are notably bullish. By 2026, annual FCF is expected to reach $109.3 Million. Simply Wall St extrapolates continued strong growth over the next decade. For instance, FCF is projected to hit $738.8 Million by 2035. These projections highlight robust anticipated expansion, even beyond what analysts have officially published (typically up to five years ahead).

According to these forecasts, the DCF model calculates an intrinsic value of $27.34 per share for Bit Digital. Compared to Bit Digital’s current share price, this suggests the stock is trading at an 85.2% discount, indicating substantial undervaluation.

Result: UNDERVALUED

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

Our Discounted Cash Flow (DCF) analysis suggests Bit Digital is undervalued by 85.2%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Bit Digital Price vs Sales

The Price-to-Sales (P/S) ratio is often used to value companies that may not yet be reliably profitable, like many in the digital assets sector. It is useful because it compares a company’s market value to its actual sales, independent of accounting decisions about earnings. For high-growth firms or those temporarily generating losses, the P/S ratio can offer a more stable benchmark for valuation than metrics relying on reported profits.

Growth expectations and perceived risk play a big role in determining what counts as a “normal” or “fair” P/S ratio. Companies expected to grow quickly or facing lower business risks can justify higher P/S multiples, while more mature or riskier businesses often carry lower ratios. Bit Digital currently trades at a P/S ratio of 13.2x. By comparison, its peer group is averaging 4.3x, while the software industry average sits at 5.3x. This places Bit Digital well above both benchmarks.

Simply Wall St’s proprietary “Fair Ratio” delivers a customized benchmark of 11.2x for Bit Digital, factoring in its growth profile, profit margins, sector characteristics and inherent risks. This makes the Fair Ratio more reliable than a simple peer or sector comparison, as it reflects real differences in business quality and potential. Bit Digital’s current P/S ratio of 13.2x is not far above its Fair Ratio. This suggests the stock is only modestly above its “justified” value by this measure.

Result: ABOUT RIGHT

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

Upgrade Your Decision Making: Choose your Bit Digital Narrative

Earlier we mentioned there is an even better way to understand valuation. Let’s introduce you to Narratives. A Narrative is a simple, intuitive way to build your own story about a company by combining your perspective on its future with your estimates of revenue, earnings, and fair value. Narratives link the company’s potential and current events to a specific financial forecast and fair value calculation, making it easy for you to explain and defend your viewpoint.

On Simply Wall St’s Community page, millions of investors already use Narratives to turn their research into confident buy and sell decisions. Narratives keep you up to date automatically as new earnings, news, or events unfold, so your story, fair value, and approach always reflect reality, not guesswork.

This means that with Bit Digital, for example, one investor might have a positive Narrative based on rapid Ethereum treasury growth and regulatory clarity, giving them a high fair value estimate. Another could see greater risk from competition and margin pressure, resulting in a much more cautious view. By comparing your Narrative's fair value to the current share price, you can instantly see whether the stock is a compelling opportunity or one to avoid.

Do you think there's more to the story for Bit Digital? Create your own Narrative to let the Community know!

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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