By Michael Kim
NASDAQ:DEFT
READ THE FULL DEFTF RESEARCH REPORT
Ahead of DeFi Technologies’ (NASDAQ:DEFT) 4Q25 earnings (likely to be announced around March 31, 2026), we are lowering our 2025 and 2026 EPS estimates from $0.14/$0.25 to $0.11/($0.01). Our downward revisions primarily reflect a flatter revenue trajectory – mostly a function of the crypto market downdraft during 4Q25 and thus far in 1Q26. Focusing on the top line, our model now calling for total revenues of $24.9 million for 4Q25 and $104.9 million for 2025, or a bit shy of management’s prior guidance of ~$116 million. To be sure, crypto market weakness (CoinDesk 20 Index down 33% in 4Q25) pressured average/ending AUM levels for the quarter, along with forecasted net outflows. In aggregate, we estimate AUM ended 2025 at ~$620 million, down 38% from $989 million as of 9/30/25. Looking ahead, further market declines thus far in 1Q26 (CD20 down 32% YTD) have likely added to AUM declines, thereby pressuring management, staking, and lending fees, even as yields remain stable.
At a high level, assuming AUM averages ~$500 million for the year and applying a 6% yield implies approximately $30 million of revenue. Adding in $12 million of trading fees/commissions from Stilman puts total revenue in the low- to mid-$40 million range for 2026, or consistent with the current operating expense run rate (ex share-based payments). As such, our model calls for around breakeven EPS for 2026, with material upside potential assuming a more favorable crypto market backdrop.
Furthermore, DEFT maintains a strong balance sheet with no debt and cash likely holding steady at around $100 million following the securities purchase agreement capital raise back in September 2025. In addition to funding new business initiatives, seeding new ETPs, and financing trading/lending/staking transactions, senior executives maintain ample capacity to acquire distressed assets (potential from DATs) at favorable valuations.
Turning to valuation, as a result of our lower earnings outlook, we are taking down our DCF-derived price target by $1 to of $5.00, still representing considerable upside potential from current levels. That said, we continue to believe DeFi Technologies is uniquely positioned to capitalize on the burgeoning digital assets ecosystem, with a diversified and differentiated portfolio of asset management, trading, infrastructure, venture capital, and research businesses. We see meaningful upside potential for the stock, as awareness and appreciation of the company’s unique business model, durable competitive advantages, considerable growth prospects, and unsustainable valuation disconnect continue to build.
SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR.
DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives payments totaling a maximum fee of up to $50,000 annually for these services provided to or regarding the issuer. Full Disclaimer HERE.