Quick Take
- The firm maintained a Buy rating on Nakamoto, with the new target implying roughly 275% upside.
- Recent refinancing pushed $105 million of principal through June 2027 and lowered borrowing costs.
TD Cowen updated its valuation for the David Bailey-led Nakamoto bitcoin treasury company, citing pressure from bitcoin's decline on the company's debt-heavy capital structure, but still maintained its Buy rating.
The bank's analysts Lance Vitanza and Jonnathan Navarrete lowered their split-adjusted price target for the Nasdaq-listed Nakamoto Inc. (NAKA) to $17. The new target still implies nearly 275% upside from NAKA's current price.
Nakamoto went through a 1-for-40 reverse split in May, making TD's previous $1 target equivalent to $40 on the current basis. Today's $17 price target represents a 58% cut to that outlook.
TD Cowen's revised base case assumed bitcoin can climb back to $100,000 by the end of 2026, which is roughly 25% off its $126,000 all-time high recorded last October. The firm also expects Nakamoto to suspend additional bitcoin (BTC) purchases until 2027.
“We continue to view bitcoin holdings as the primary driver of value,” Vitanza and Navarrete wrote in a Monday research note.
The analysts said Nakamoto‘s debt and preferred securities make its common shares more sensitive to changes in bitcoin’s price. They valued its projected year-end bitcoin holdings at about $521 million, though those obligations reduce the value left for common shareholders.
Nakamoto currently holds 4,467 BTC worth around $290 million, making it the 22nd-largest publicly traded bitcoin holder, according to Bitcoin Treasuries.
TD also views Nakamoto's recent balance sheet moves favorably. The company repaid approximately $45 million of debt, extended $105 million of principal through June 2027, lowered its borrowing costs and authorized a share repurchase program of up to $25 million.
The firm also pointed to Nakamoto completing the closure of its legacy healthcare clinics last month and is now focused on bitcoin media, asset management and advisory services.
NAKA was trading at $4.65 on Monday, down more than 4.5% on the day. The stock has fallen over 71% this year, compared with bitcoin's roughly 26% decline over the same period.
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