As the core mechanism behind the inner workings of cryptocurrencies, the blockchain represents one of the most revolutionary innovations. By creating a decentralized value accountability system, the blockchain addresses the double-spending problem associated with digital payments. That is, the system prevents the spending of the same token twice. It’s this ability to foster a zero-trust fluid environment that drives the case for blockchain stocks.
To be sure, when arguably most people hear this phrase, they’re thinking about token-mining enterprises. That’s an important component to the sector, but that’s not the only source of utility. Instead, the underlying decentralized technology enables people and entities who have never met each other to transact digital assets of real economic value with each other with the same level of confidence as traditional transactions.
Notably, even former President and current Republican candidate Donald Trump is getting in on the action. Recently, “The Donald” remarked that he supports the idea of a U.S. stockpile of mainline cryptos. While the mechanics of such a proposition remains a mystery, here’s the bottom line: Trump (apparently) loves cryptos. And that could be a big positive for these blockchain stocks.
Coinbase Global (COIN)
Despite Trump’s positive overtures, Coinbase Global (NASDAQ:COIN) has been struggling over the past several sessions. It doesn’t help that over the weekend the cryptocurrency sector suffered a massive loss of value. Thanks to the fallout, COIN stock trades for roughly 12X trailing-year sales. That could be an opportunity in the making.
In the past year, COIN stock traded at an average sales multiple of 14.34X. During the first quarter of this year, the metric stood as high as 21.7X. That tells me that the market under the right circumstances will accept a multiple of nearly 22 times revenue. So, at this moment, Coinbase appears relatively undervalued.
Not only that, analysts anticipate that fiscal 2024 revenue could land at $5.84 billion. If so, that would imply a growth rate of 87.9% from last year’s print of $3.11 billion. It also means that assuming a shares outstanding count of 202.95 million, COIN would be trading at 7.1X projected revenue.
That would put Coinbase at levels last seen during October 2023. In other words, COIN could be one of the blockchain stocks to speculate on.
Marathon Digital (MARA)
Another enticing idea among blockchain stocks, Marathon Digital (NASDAQ:MARA) has also struggled recently. With crypto valuations plummeting, the underlying mining business becomes suspect. However, it may also set up a contrarian opportunity.
Right now, MARA stock exchanges hands at 7.44X trailing-year revenue. In the past year, the average multiple stood at 10.27X. Also, it’s worth pointing out that in Q4 of last year, the metric stood at 14.34X. In the six months ending March 2024, the average price-to-sales multiple came in at a lofty 12.77X. It’s possible that with the right catalyst, Marathon could rise to its former valuation.
Another element to consider is the analyst projections. By the end of fiscal 2024, sales could hit $695.38 million, up 79.4% from the prior year. Assuming a shares outstanding count of 294.48 million, MARA stock is presently trading at 7.28X projected sales.
Earlier this year, MARA stock fell to a low in terms of sales multiples of 6.47X. So, we’re getting very close to when Marathon will look very attractive. It’s definitely one of the blockchain stocks to keep on your radar.
Riot Platforms (RIOT)
Another popular entity among blockchain stocks, Riot Platforms (NASDAQ:RIOT) is appropriate for those who want to take longshot wagers in the decentralized ecosystem. As with its peers, the heavy losses in the virtual currency space led to a significant erosion in value. Unfortunately, prospective speculators should anticipate more volatility ahead.
Nevertheless, RIOT stock also looks attractive from the perspective of a gambler. Right now, shares trade hands at 6.69X trailing-year sales. In the past year, this metric averaged 7.38X. In Q4 of last year, the multiple soared to a high of 9.78X. In the half-year period ending Q1 2024, the average multiple stood at 8.71X. In more bullish cycles, RIOT has significant room to climb.
What makes the mining entity so intriguing is that analysts believe fiscal 2024 sales could hit $402.01 million. If so, that would represent a lift of 43.2% from last year’s print of $280.68 million. Assuming a shares outstanding count of 303.52 million, RIOT is actually trading at 6.47X projected revenue.
Earlier this year, RIOT traded for as low as 5.59X. So, we’re getting very close to a buying range.
Hut 8 (HUT)
A high-risk, high-reward venture among blockchain stocks, Hut 8 (NASDAQ:HUT) is most appropriate for seasoned speculators. Last Friday, HUT stock suffered a loss of nearly 11%, wider than many other related entities. It’s been struggling badly as the cryptocurrency market slips beneath critical technical thresholds. Still, it could potentially be a bold bet to jump on soon.
Currently, HUT stock trades hands at 14.85X sales. That’s elevated compared to the prior year’s average multiple of 9.11X. Also, in Q1 of this year, the metric was at 13.23X. So, HUT may have more to fall before it looks genuinely attractive.
However, the thing to keep in mind is that covering experts believe fiscal 2024 sales could land at $261.12 million. That’s up a 170% from last year’s print of $96.71 million, a staggering projected growth rate. Assuming a shares outstanding count of 90.39 million, HUT is actually trading at a forward sales multiple of 4.29X.
Given the extreme negative acceleration, it may be best to wait around a few sessions before moving in. Still, that’s a very attractive multiple considering the bounce-back potential of cryptos.
Cisco (CSCO)
Moving over to the indirect players among blockchain stocks, Cisco (NASDAQ:CSCO) makes for an attractive idea for those who seek stable exposure to a burgeoning technology. Presently, the company is utilizing blockchain tech to develop a comprehensive solution for enterprise-level clients.
Despite being a more “respectable” name — and I mean that with all due respect to pure-play blockchain stocks — CSCO stock still suffered from the recent tech sector correction. However, that could also spell opportunity for speculators. Right now, CSCO trades hands at 3.43X sales. In the past year, the metric stood at 3.64X. Also, about one year ago, the multiple approached on average 4X.
Now, the tricky matter is that in fiscal 2024, analysts see sales dipping about 1% from last year. That said, in fiscal 2025, revenue could rise to $55.68 billion, up from 2023’s haul of $54.17 billion.
Also, unlike other blockchain stocks, Cisco offers passive income. In this case, a forward yield of 3.43%. Further, the payout ratio comes in at 53.04%, which is reasonable. Overall, CSCO is a solid bet for the conservative investor.
Visa (V)
A credit services powerhouse, Visa (NYSE:V) is best known for providing its branded payment cards. However, the company recognizes that money itself is evolving. In response, it has evolved its network and crypto solutions, becoming one of the best indirect blockchain stocks.
Currently, V stock is priced at 15.61X sales. That’s incredibly high compared to the credit services industry. However, few enterprises have the massive footprint of Visa. What’s more, in the past year, the market accepted a sales multiple of 16.23X. Throughout Q1 of this year, the multipole reached an average of 17.33X. So, it’s conceivable that Visa may have a valuation ceiling to expand into, so to speak.
Another compelling point about V stock is that experts believe the underlying enterprise could post sales of $35.8 billion this year. If so, we’re talking about a 20.2% lift from last year’s print of $29.78 billion. Assuming a shares outstanding count of 1.67 billion, Visa is trading at 12.44X projected sales.
That’s still not undervalued against the industry. However, given the expected performance of Visa, it could be a deal.
IBM (IBM)
One of the biggest legacy tech giants in the world, IBM (NYSE:IBM) has recently stormed into relevance after prolonged years of sideways trading. By focusing on contemporary innovations such as cloud computing and artificial intelligence, the “Big Blue” of today looks far more interesting. In addition, the company utilizes blockchain technology for practical pursuits beyond cryptos.
To be fair, IBM stock isn’t exactly a riveting investment. However, compared to other tech enterprises, the equity has been able to weather the storm reasonably well. At the moment, shares trade hands at 2.82X sales. That’s actually a premium to the average multiple of 2.51X seen in the prior year. Also, throughout Q2 of this year, the metric sat at 2.58X.
Nevertheless, IBM hasn’t been exempted from the tech sector fallout. Investors may be able to utilize the red ink to their advantage. Keep in mind that analysts project slow-and-steady growth through the end of fiscal 2025, when sales may hit $66.14 billion. Last year, the company posted $61.86 billion on the top line.
Finally, IBM is one of the few blockchain stocks that reward you for holding it. It pays a decent forward yield of 3.53%.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
