Galaxy Digital Holdings (GLXY) AI Stock Analysis

• Market Cap: $6.59B
• Dividend Yield: N/A
• Average Volume (3M): 1.07M
• Price to Earnings (P/E): 3.7
• Beta (1Y): 2.33
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: CA
• Employees: 514
• Sector: Financial
• Sector Strength: 84
• Industry: Financial - Capital Markets
• EPS (TTM): 5.25
• Shares Outstanding: 125,778,360
• 10 Day Avg. Volume: 918,528
• 30 Day Avg. Volume: 1,069,330
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.07
• Price to Cash Flow (P/CF): -110.40
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$43.01
• Price Target Upside: 122.83% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Galaxy Digital Holdings is positioned for growth with strong revenue generation and strategic expansions in AI and digital assets. While financial health is solid, cash flow challenges and increased expenses pose risks. The stock's technical indicators show positive momentum, though caution is advised due to overbought conditions. Valuation metrics suggest potential undervaluation. Overall, the company shows promise but requires careful monitoring of liquidity and operational efficiency.

Positive Factors

Market Environment

Expectations for a more favorable operating environment for the crypto industry with a new, pro-crypto administration.

Partnerships

Galaxy announced that it has executed a major non-binding term sheet with an undisclosed U.S.-based hyperscaler to host up to 800 MW of GPUs at the Helios facility in West Texas.

Revenue Potential

Galaxy could generate over $130M in annualized revenue for every 100 MW of capacity at Helios that is dedicated to HPC/AI.

Negative Factors

Financial Performance

Galaxy reported 3Q24 results that fell short of consensus forecasts against a challenging market environment for crypto marked by mid-teen sequential declines in trading volumes and lower crypto asset prices.

Market Challenges

The timing on a US stock listing could also be pulled forward somewhat.

Galaxy Digital Holdings Business Overview & Revenue Model

Company Description

Galaxy Digital Holdings Ltd., an asset management firm, operates in the digital asset, cryptocurrency, and blockchain technology industry. It operates through five segments: Trading, Principal Investments, Asset Management, Investment Banking, and Mining. The company provides spot, derivate, and financing liquidity to institutional clients, counterparties, and venues that transact in cryptocurrencies and other digital assets; and offers access to traded cryptocurrencies to clients and counterparties across a suite of service offerings, including over-the-counter (OTC) spot liquidity provision, on- exchange liquidity provision, OTC options and trading, and bespoke lending and structured products, as well as engages in the proprietary quantitative, arbitrage, and macro trading strategies. It also manages third party capital across traditional and alternative asset classes. In addition, the company offers financial advisory services, such as general corporate, strategic, mergers and acquisitions, divestitures, and restructuring advisory services, as well as equity, debt, and project finance capital markets services to public and private clients. Further, it has a strategic focus to provide financial tools to North American miners, as well as has partnership with third-party data center providers and hosts its proprietary bitcoin mining equipment for helping to secure the Bitcoin network. Additionally, the company manages various portfolio of private investments across the digital assets industry, such as traditionally structured companies, as well as in those building digital asset networks powered and capitalized by tokens. Galaxy Digital Holdings Ltd. is headquartered in New York, New York.

How the Company Makes Money

Galaxy Digital Holdings generates revenue through several key streams. Its trading division engages in proprietary trading and market making activities in digital assets, earning profits from buying and selling cryptocurrency. The asset management sector manages a portfolio of digital asset investment funds, earning fees based on assets under management and performance. Principal investments involve deploying capital directly into promising blockchain and cryptocurrency ventures, generating returns through strategic exits. Additionally, the advisory services division provides consulting and strategic guidance to businesses within the digital asset space, earning fees for their expertise. Significant partnerships with other financial institutions and technology firms enhance Galaxy Digital's ability to access new opportunities and expand its market presence.

Galaxy Digital Holdings Financial Statement Overview

Summary

Galaxy Digital Holdings shows strong revenue growth and high profitability with a robust balance sheet characterized by substantial equity and zero debt. However, negative cash flows suggest liquidity challenges, and operational efficiency requires improvement, as indicated by the negative EBIT margin.

Income Statement

The company's TTM revenue stands at $280.5 million, indicating a significant increase from previous periods with zero revenue, reflecting strong growth. The net profit margin is exceptionally high at 364%, driven by a notable TTM net income of $1.02 billion. However, EBIT margin is negative at -2.6%, suggesting operational challenges. EBITDA margin is strong at 113.7%, alleviating some concerns about operational profitability.

Balance Sheet

The balance sheet shows a robust equity position with a debt-free structure, as indicated by a debt-to-equity ratio of 0. The equity ratio is healthy at 90.7%, providing stability. Return on equity (ROE) is substantial at 106.4%, driven by high net income, indicating effective use of equity. The overall financial health appears stable and well-capitalized.

Cash Flow

The company reports negative operating cash flow of -$17.8 million in the TTM period, indicating cash constraints. Free cash flow is also negative, suggesting potential liquidity issues. The operating cash flow to net income ratio is negative, highlighting cash conversion challenges. Despite this, financing cash flow is positive, possibly due to external financing activities.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
280.46M	0.00	0.00	0.00	0.00	0.00
	Gross Profit
173.15M	0.00	0.00	0.00	0.00	0.00
	EBIT
-7.17M	493.26M	256.04M	-6.78M	12.42M	137.07M
	EBITDA
319.06M	493.24M	-460.77M	-4.25M	-1.90M	-132.52M
	Net Income Common Stockholders
1.02B	454.76K	-522.68M	402.08M	103.39M	-270.88M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
169.00	833.00K	10.05M	26.82M	0.00	0.00
	Total Assets
204.58M	875.24M	394.27M	888.78M	267.77M	81.04M
	Total Debt
0.00	0.00	0.00	0.00	0.00	0.00
	Net Debt
-169.00	-833.00K	-10.05M	-26.82M	0.00	0.00
	Total Liabilities
0.00	94.20M	94.97M	102.48M	20.78M	0.00
	Stockholders Equity
204.58M	781.03M	299.31M	786.29M	246.99M	81.04M
Cash Flow		Free Cash Flow
-17.79M	-16.52M	-76.77M	-19.55M	103.39M	-169.00
	Operating Cash Flow
-17.79M	-16.52M	-76.77M	-19.55M	103.39M	-169.00
	Investing Cash Flow
-64.16M	6.86M	107.40M	12.24M	-49.28M	0.00
	Financing Cash Flow
112.09M	439.00K	-47.40M	34.13M	49.28M	0.00

Galaxy Digital Holdings Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 19.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:GLXY, the sentiment is Neutral. The current price of 19.3 is above the 20-day moving average (MA) of 18.71, below the 50-day MA of 24.26, and below the 200-day MA of 20.44, indicating a neutral trend. The MACD of -1.74 indicates Negative momentum. The RSI at 45.34 is Neutral, neither overbought nor oversold. The STOCH value of 72.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:GLXY.

Galaxy Digital Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GLXY	65 Neutral	$6.59B	3.67	61.32%	―	―	―
Sector *	64 Neutral	$14.46B	10.12	8.75%	4.25%	17.00%	-11.86%
HUT	49 Neutral	C$2.08B	4.28	2.56%	―	199.41%	―
CSTR	38 Underperform	C$6.66M	―	-41.72%	―	-19.38%	78.11%

Galaxy Digital Holdings Corporate Events

Galaxy Asset Management Reports Decrease in December 2024 AUM

Galaxy Asset Management, a part of Galaxy Digital Holdings, announced a preliminary assets under management (AUM) of $5.7 billion as of December 31, 2024, marking a 6.5% decrease from the prior month due to market depreciation and net outflows from its Passive Funds. The company also stated that AUM figures would now be published quarterly instead of monthly, aligning with Galaxy’s earnings releases, which may impact stakeholders’ access to timely financial data.

Galaxy Digital Closes $402.5M Exchangeable Notes Offering

Galaxy Digital Holdings has successfully closed a $402.5 million offering of 2.50% exchangeable senior notes due 2029, aimed at enhancing its high-performance computing infrastructure and supporting general corporate activities. The company is also undergoing a corporate reorganization to re-domicile to the United States, which involves converting its ordinary shares into Class A common stock. The notes, which accrue interest at 2.50% annually, offer exchange options under specific conditions and are set to mature by December 2029.

Galaxy Digital’s Asset Growth Reaches $4.8 Billion

Galaxy Asset Management, a part of Galaxy Digital Holdings, reported a 4% increase in assets under management, reaching $4.8 billion by the end of October 2024. This growth was driven by market appreciation and net inflows into their funds, highlighting Galaxy’s strong presence in the digital asset sector.

Galaxy Digital’s $350 Million Upsized Note Offering

Galaxy Digital Holdings has announced the pricing of a $350 million offering of exchangeable senior notes due 2029, marking an increase from the initially planned $300 million. The funds will be used to enhance its computing infrastructure and for general corporate purposes. This move aligns with Galaxy’s broader corporate reorganization and re-domiciliation plans to the United States.

Galaxy Digital Announces $300 Million Notes Offering

Galaxy Digital Holdings is launching a private offering of $300 million in exchangeable senior notes due 2029 to fund the expansion of its computing infrastructure in Texas and for general corporate purposes. The notes, which are unsecured and bear interest semi-annually, offer investors the potential to exchange them for cash or shares under certain conditions. This move aligns with Galaxy’s strategic reorganization plan to re-domicile to the U.S. and convert its shares into a new class of stock.

Galaxy Digital’s Q3 Gains and Strategic Moves

Galaxy Digital Holdings reported a significant reduction in net loss to $54 million in Q3 2024, coupled with a 30% increase in operating revenue despite challenging market conditions. The company is making strategic moves by planning a high-performance computing facility at their Helios site in Texas and working towards a Nasdaq listing.