3350) Stock Could Be 29% Overvalued On Its US Bitcoin Push

Metaplanet (TSE:3350) Stock Could Be 29% Overvalued On Its US Bitcoin Push

• 3350.T
• BTC-USD
• 3350

Metaplanet stock has delivered a very large three year return, yet the current valuation checks suggest the shares are trading at a premium to their intrinsic value estimate. Both the Discounted Cash Flow (DCF) intrinsic value model and market multiples point in the same direction for Metaplanet, even after the recent news around its Bitcoin focused expansion into the United States.

• Over the past three years, Metaplanet has returned roughly 14x. This puts extra focus on whether the current share price can be supported by future cash flows rather than past gains.

• The planned build out of a U.S. Bitcoin treasury vehicle through the Superplanet structure may support higher growth expectations. At the same time, concentration in Bitcoin holdings and capital market execution risk can weigh on how investors price the stock.

• On a broad set of valuation checks, Metaplanet screens as expensive rather than a clear bargain, with 0 of 6 checks indicating undervaluation.

The issue now is whether Metaplanet’s current market price already reflects, or even exceeds, what the intrinsic value and multiples suggest is reasonable after such a strong multi year run.

Stress test Metaplanet’s sharp three year move by comparing it with hand picked companies on our 23 high quality undervalued stocks that combine quality fundamentals with more modest valuation signals.

Does Metaplanet Look Pricey on Cash Flow?

The Discounted Cash Flow (DCF) model estimates what Metaplanet’s future cash generation could be worth today. On the latest figures, the company is producing last twelve month free cash flow of about ¥4.8 million. The model applies a growing cash flow profile over the coming years and arrives at an intrinsic value estimate of around ¥267 per share.

The current share price sits roughly 29.5% above that estimate. This suggests that, on a DCF basis, Metaplanet stock appears more expensive than a clear bargain. The planned Superplanet Bitcoin treasury deal in the United States helps explain why the market is currently willing to pay a premium to the intrinsic value indicated by cash flows alone.

On these cash flow assumptions Metaplanet screens as overvalued relative to its DCF based intrinsic value estimate.

Our Discounted Cash Flow (DCF) analysis suggests Metaplanet may be overvalued by 29.5%. Discover 23 high quality undervalued stocks or create your own screener to find better value opportunities.

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

Source: finance.yahoo.com