Tokens.com's (OTCQB:SMURF, NEO:COIN.AQN) current share price represents an attractive entry-point for investors seeking exposure to ‘web3’, that’s according to analysts at Stifel.
The broker describes the OTC-quoted investor in blockchain, crypto and metaverse assets as “a rare pure-play on the growth of the nascent Web3.0 market”.
Stifel has a ‘speculative buy’ recommendation for Token.com with a valuation ‘anchored’ on net asset value and a sum-of-the-parts view of the business – those parts include some US$5.5mln of cash and US$6.8mln of crypto holdings (staked in Ethereum and Polkadot), in the context of the stock’s equity market capitalisation of around US$19mln.
The broker, in a note, highlighted quarterly results released this week, for the period ended 31 December 2022, showed a 50% quarter-on-quarter rise in revenue (US$125,000 vs Stifel’s estimate of US$208,000), though it noted management’s ability to preserve liquidity in a challenging market.
Token.com retains sufficient cash (FIAT) to keep running for 24 months, according to Stifel.
“While crypto markets have pulled back, developers remain laser focused,” Stifel analyst Bill Papanastasiou said in a note.
“We view the current entry point as attractive for investors given our long-term view that brands will leverage this new immersive technology to drive engagement amongst their following and be part of their customers' identity in the digital world.
“We see near-term potential upside on COIN's ability to sign new virtual lease arrangements and enter into bespoke contracts that offer asymmetric potential upside on branded NFTs.”
The analyst added: “The company has built a diversified portfolio of major cryptocurrencies that generate a steady revenue stream via staking and is leveraging strategic non-fungible token (NFT) assets to build relationships with leading companies as they carve out their position as the go-to market partner for brands exploring a Web3.0 strategy.”