Semler Scientific Trading Near Bitcoin NAV with Significant Upside Potential

Semler Scientific (SMLR) is trading slightly above its bitcoin holdings' market value, with a market NAV of 1.04. Analyst Mark Palmer from Benchmark noted a significant valuation disconnect, stating the market undervalues Semler's potential to leverage its bitcoin assets.

Key points include:

Palmer maintains a buy rating and a $101 price target, nearly triple the current price of $35.
Semler adopts a “slow money” strategy, focusing on preserving shareholder value without aggressive equity issuance.
New Director of Bitcoin Strategy Joe Burnett plans to increase bitcoin holdings through operating cash flow, low-cost convertible debt, and selective at-the-money issuances.
Semler holds $100M in 4.25% convertible notes due 2030, with room to issue long-term, bitcoin-backed debt.
As of July 31, Semler held 5,021 bitcoin, with a cost basis of $475.8 million 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 aims for 10,000 BTC by end of 2025, 42,000 BTC by 2026, and 105,000 BTC by 2027.
Benchmark's target reflects a sum-of-the-parts analysis considering future values of Semler’s bitcoin treasury and healthcare operations.

The stock’s current trading near its bitcoin NAV shows little premium for strategic flexibility, which Benchmark expects will improve as the capital strategy unfolds.