Semler Scientific Has 3x Upside, Says Benchmark, as Market Overlooks Bitcoin Expansion Strategy

Semler Scientific (NASDAQ: SMLR) is trading at just a slight premium to the market value of its bitcoin holdings, with a market net asset value (mNAV) ratio of 1.04 — a sign of mispricing, according to brokerage Benchmark.

Following Semler’s Q2 earnings report, Benchmark analyst Mark Palmer reiterated a Buy rating and a $101 price target, nearly three times the current trading level of $35. He emphasized that investors are giving “virtually no credit” to the company’s potential to scale its bitcoin exposure through intelligent, low-risk leverage.

“Unlike peers aggressively issuing equity, Semler is taking a ‘slow money’ approach that prioritizes shareholder value,” Palmer noted. He added that this conservative, methodical strategy offers significant upside optionality that is not currently reflected in the stock price.

Semler’s recently appointed Director of Bitcoin Strategy, Joe Burnett, outlined a plan to gradually expand bitcoin holdings using a mix of internally generated cash flow, low-cost convertible debt, and carefully timed at-the-money (ATM) share offerings.

The company currently holds $100 million in 4.25% convertible notes due 2030, and management sees additional capacity to issue long-dated, bitcoin-collateralized debt to further enhance equity returns without excessive dilution.

As of July 31, Semler held 5,021 BTC with a $475.8 million cost basis and a market value of $586.2 million, generating an unrealized gain of $110.4 million and a 31.3% year-to-date BTC yield.

Management remains committed to expanding its bitcoin treasury, targeting 10,000 BTC by end-2025, 42,000 BTC by 2026, and 105,000 BTC by 2027.

Benchmark’s $101 price target is derived from a sum-of-the-parts analysis that incorporates both the projected value of Semler’s bitcoin holdings and its underlying healthcare business, including growth prospects for its CardioVanta unit.

Despite its strategic roadmap and capital flexibility, Semler’s stock currently reflects little premium beyond the value of its bitcoin. Benchmark believes this disconnect will narrow as the company continues to execute its bitcoin-centric capital strategy.