Bitcoin Treasury Firm Semler Scientific Still Has 3X Upside: Benchmark

Semler Scientific (SMLR) is trading just above the market value of its bitcoin holdings, with a market NAV (mNAV) of 1.04, highlighting what broker Benchmark calls a significant valuation disconnect.

Markets, argued analyst Mark Palmer following the company’s second quarter earnings yesterday, are giving “virtually no credit for [Semler’s] ample room to use ‘intelligent leverage’ to add to its bitcoin holdings.”

Reiterating his buy rating and $101 price target — or nearly triple the current price of $35 — Palmer said there’s much “upside optionality” not priced into the stock.

Unlike other bitcoin treasury firms that lean on aggressive equity issuance, Semler is embracing a “slow money” approach, wrote Palmer.

Newly appointed Director of Bitcoin Strategy Joe Burnett laid out a plan to scale bitcoin holdings through a mix of operating cash flow, low-cost convertible debt, and selective at-the-money (ATM) issuances, all aimed at preserving shareholder value and avoiding dilution.

The company holds $100M in 4.25% convertible notes due 2030 and, according to management, has significant headroom to issue long-term, bitcoin-backed debt to amplify equity upside, the report noted.

As of July 31, Semler held 5,021 bitcoin with a $475.8 million cost basis and a market value of $586.2 million, reflecting a $110.4 million unrealized gain and a 31.3% year-to-date BTC yield.

Management remains confident in reaching its target of 10,000 BTC by year-end 2025, and long-term goals of 42,000 BTC by 2026 and 105,000 by 2027.

Benchmark’s $101 target is based on a sum-of-the-parts analysis incorporating the expected future value of Semler’s bitcoin treasury alongside its healthcare operations, including the emerging CardioVanta unit.

The stock, trading near its bitcoin net asset value (NAV), reflects little premium for its strategic flexibility, a gap Benchmark believes will close as the company executes on its capital strategy.

Read more: Semler Scientific Becomes 14th-Largest Public Bitcoin Holder After $25M BTC Buy

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