Semler Scientific’s ‘slow money’ bitcoin buying strategy should offset diagnostic headwinds, Benchmark says
Semler Scientific shares traded lower on Tuesday after reporting second-quarter earnings. Revenue came in at $8.22 million, which was slightly above consensus estimates. Of note, more than 100% of the company's $66.9 million net income stemmed from an unrealized bitcoin mark-to-market gain of $83.8 million.
The healthtech company is among the 15 largest publicly traded holders of bitcoin, owning 5,021 BTC as of July 31, with a cost basis of about $475.8 million. And with Semler (ticker SMLR) trading at market Net Asset Value (mNAV) of 1.04, Benchmark analysts said the firm's earnings call underlines its sources of upside optionality not reflected in its current valuation.
"While SMLR has taken a deliberate approach to its bitcoin acquisition strategy that stands in contrast to some of its more aggressive peers," analysts led by Mark Palmer wrote in a note to clients, "its stock's market value gives virtually no credit for its ample room to use 'intelligent leverage' to add to its bitcoin holdings [or] its newly energized focus with the recent addition of Joe Burnett as Director of Bitcoin Strategy."
On the earnings call, Burnett said Semler is avoiding "fast money" tactics like issuing stock quickly for bitcoin buys. Instead, it’s focused on "slow money" — using tools like cash flow, low-cost debt, and selective ATM issuances to gradually expand holdings in ways that boost long-term shareholder value. Along with Burnett's hiring in June, the company announced plans to hold 10,000 BTC by the end of 2025, 42,000 BTC by year-end 2026, and 105,000 BTC by year-end 2027.
Semler's core business line
The analysts also noted Semler's prospects of turning its healthcare business into a source of consistent cash flow to fund further acquisitions.
Semler's main diagnostic business, especially its QuantaFlo device, has struggled due to Medicare reimbursement changes tied to new coding rules for peripheral artery disease (PAD), which cut payments and hurt revenue. The company’s customer base is also concentrated among a few major insurers.
To respond, Semler launched CardioVanta, a SaaS business focused on heart failure detection. Leadership believes CardioVanta could become a major cash generator, supporting both business growth and future bitcoin purchases.
Benchmark reiterated a "buy" rating and $121 price target on SMLR shares.
Semler Scientific's stock traded down 2.8% to $34.37 on Tuesday, according to The Block's SMLR price data. Shares are down nearly 40% so far this year.
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