Sharplink (NasdaqCM:SBET) is in focus after buying 10,000 Ether, executing an open market repurchase of more than 2.13 million shares, and raising US$75 million in a registered direct offering.

The recent Ether purchase, buyback and capital raise come against a mixed price backdrop, with Sharplink’s share price currently at US$5.74, a 7 day share price return of 7.89% but a 1 year total shareholder return that has declined 84.23%. This suggests recent momentum has picked up after a much weaker longer term experience for holders.

If Sharplink’s crypto focused moves have caught your eye, it may also be a good time to see what else is happening across digital asset related stocks through the 18 cryptocurrency and blockchain stocks

Sharplink has just added more Ether, bought back its own stock and raised fresh capital. This puts the timing question front and center for you: buy after this flurry of activity, or wait for a cheaper entry as sentiment settles?

Preferred Price-to-Sales Multiple of 28.4x: Is It Justified?

Sharplink closed at $5.74, and on current revenue it trades on a P/S of 28.4x, which stands out as expensive next to both peers and fair value estimates.

The P/S multiple compares the company’s market value with its revenue and is useful for loss making stocks like Sharplink where earnings are still negative. At a P/S of 28.4x on $39.37 million of revenue and a reported net loss of $1,419.16 million, the market is placing a high value on each dollar of sales despite the absence of profits.

Against that backdrop, Sharplink is described as expensive versus its peer average P/S of 1x and the US Hospitality industry average of 1.7x, which is a large gap. It is also described as expensive compared to an estimated fair P/S of 6x, a level the market could move towards if expectations cool or if peers start to catch up on revenue multiples.

Result: Price-to-Sales of 28.4x (OVERVALUED)

However, Sharplink’s very high P/S multiple and large reported net loss, combined with its focus on Ether treasury management, leave the story sensitive to valuation resets and crypto market swings.

Next Steps

With Sharplink caught between a rich valuation and a crypto heavy story, it makes sense to move quickly and test the numbers for yourself. Weigh both sides of the debate by reviewing the 1 key reward and 3 important warning signs.

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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.