Coverage initiation and valuation
Compass Point began formal coverage of BitGo Holdings (NYSE:BTGO) with a Buy recommendation and set a price objective of $17.00, according to a research note published Monday. That target implies roughly 58% upside from the cited current share price of $10.76, though InvestingPro data referenced in the note indicates BitGo may be trading above its Fair Value.
Shift toward a full prime brokerage
The research firm emphasized BitGos strategic shift from a pure custody business into a full-service prime brokerage model. Compass Points analyst Ed Engel noted that custody-related fees account for about 50% of net revenue today. The firm sees the prime brokerage expansion as a lever to increase average revenue per user, helping to counteract any downward pressure on custody fees.
Profitability and margin context
Despite the strategic push, BitGos reported gross profit margin is low. InvestingPro data cited in the note places the companys gross profit margin at 1.64%. Compass Point nonetheless points to profitability on a trailing-twelve-month basis, with a reported P/E ratio of 14.04.
The analyst note also records a 17x EBITDA multiple for BitGo, which Compass Point says is in line with comparable crypto companies. The firm highlights that BitGos revenue mix has a relatively higher share coming from subscription and services versus some peers, a factor it views positively for revenue durability.
Revenue sensitivity and investor focus
Compass Point estimates that under 35% of BitGos net revenue is directly tied to crypto price movements. The research house suggested the market may be overly concentrated on BitGos core custody business and not sufficiently valuing the potential to cross-sell prime services to existing clients.
According to the note, the firm anticipates a re-rating of BitGos valuation multiple if revenue growth proves resilient through periods of market volatility.
Other analyst views and market context
The note summarizes a set of recent analyst actions. Deutsche Bank initiated coverage with a Buy rating and a $17.00 price target, citing potential gains from institutional crypto adoption trends. Mizuho began coverage with an Outperform rating and the same $17.00 target, pointing to BitGos scale in managing over $100 billion in assets. Cantor Fitzgerald initiated with an Overweight rating, characterizing BitGo as an infrastructure and software layer for the crypto industry. By contrast, Goldman Sachs offered a Neutral rating with a lower price target of $11.50, based on adjusted EBITDA estimates.
Strategic partnership
Separately, BitGo announced a partnership with InvestiFi aimed at broadening digital asset trading capabilities nationwide. The collaboration intends to enable digital asset trading for account holders at credit unions and community banks across all 50 U.S. states by leveraging BitGos Crypto-as-a-Service infrastructure.
Outlook
Compass Points initiation frames BitGo as a custodian that is actively transforming into a broader prime services provider, with the analyst arguing that cross-sell opportunities and a subscription/services-heavy revenue mix could support valuation upside. That view sits alongside a range of other analyst stances, from Buy and Outperform ratings with $17.00 targets to a more cautious Neutral view with an $11.50 target.
Note: All data and analyst opinions presented here are drawn from the research note and the items cited within it.