Bakkt Holdings, Inc. (BKKT) Stock Analysis and Metrics

Sector: Technology Industry: Software - Infrastructure CIK: 0001820302

P/B 0.77

P/E -2.13

P/S 0.03

Market Cap 87.67 Mn

ROIC (Qtr) -552.77

Div Yield % 0.00

Rev 1y % (Qtr) 0.00

Total Debt (Qtr) 0.00

Debt/Equity (Qtr) 0.00

About

Bakkt Holdings, Inc., commonly referred to as Bakkt, is a technology company operating in the cryptocurrency and digital assets market. Its stock symbol is BKKT. Bakkt was established in 2018 as a subsidiary of Intercontinental Exchange, Inc. (ICE), a leading global provider of financial market infrastructure and technology. Bakkt's primary business involves building technology that empowers its clients to deliver new opportunities to their customers through Software as a Service (SaaS) and Application Programming Interface (API) solutions that...

Bakkt Holdings, Inc., commonly referred to as Bakkt, is a technology company operating in the cryptocurrency and digital assets market. Its stock symbol is BKKT. Bakkt was established in 2018 as a subsidiary of Intercontinental Exchange, Inc. (ICE), a leading global provider of financial market infrastructure and technology.

Bakkt's primary business involves building technology that empowers its clients to deliver new opportunities to their customers through Software as a Service (SaaS) and Application Programming Interface (API) solutions that unlock crypto and drive loyalty, engagement, and performance. The company's platform is designed to operate across various crypto assets, providing clients the flexibility to select some or all of its capabilities based on their specific needs and objectives.

The company generates revenue primarily from platform fees charged to its clients for the use of its platforms by their customers, as well as from markup and/or trade fees on the purchase and sale of crypto assets. Bakkt's clients include financial institutions, hedge funds, merchants, retailers, third-party partners, and other businesses.

Bakkt's platform offers a range of services, including crypto asset trading, custody services, and external transfers of crypto assets. It is designed to be user-friendly and accessible to a wide range of customers, including individuals and institutions. Among its offerings are the Bakkt Marketplace, Bakkt Crypto, Bakkt Trust, Bakkt Brokerage, and Loyalty Solutions.

The Bakkt Marketplace is a platform that enables customers to buy, sell, and store crypto assets in a simple, intuitive digital experience accessed via APIs or embedded web experience. Bakkt Crypto is a platform that offers a range of crypto solutions, including trading, custody, and external transfers of crypto assets. Bakkt Trust is a qualified custody solution that provides institutional-grade custody services for crypto assets. Bakkt Brokerage is a registered broker-dealer that offers a range of brokerage services, including trading, custody, and external transfers of crypto assets. Loyalty Solutions is a business that enables clients to allow their customers to redeem loyalty points for items, including travel and merchandise.

Bakkt operates in a highly competitive market, with a number of established players and new entrants. However, the company believes that its technology and expertise in the crypto and digital assets space give it a competitive advantage. Bakkt's clients include a number of well-known financial institutions and companies, and the company is focused on building strong relationships with these clients and expanding its network of partners.

Bakkt's customers include financial institutions, fintechs, broker-dealers, neobanks, registered investment advisers, funds, merchants, and other businesses. The company's crypto-related capabilities facilitate new asset acquisition opportunities for its customers, in addition to the secure safekeeping of acquired crypto assets and crypto assets stored on behalf of institutional clients.

In terms of its growth strategy, Bakkt is focused on expanding its client base and increasing its revenue through its platform fees and markup and/or trade fees. The company is also investing in its technology and infrastructure to improve its platform and services, and is exploring new opportunities in the crypto and digital assets space.

Bakkt's position within the industry is unique, with its technology and expertise in the crypto and digital assets space giving it a competitive advantage. The company's clients include a number of well-known financial institutions and companies, and it is focused on building strong relationships with these clients and expanding its network of partners.

In terms of its regulatory position, Bakkt is subject to a range of regulations and laws, including securities laws, anti-money laundering laws, and know-your-customer laws. The company is working to ensure compliance with these regulations and laws, and is committed to providing a secure and reliable platform for its customers.

Stock Price Chart

Analysis

Pros

Tangible assets of 188.05M provide exceptional 238.34x coverage of deferred revenue 789000, showing strong service capability backing.
Tangible assets of 188.05M provide robust 7.61x coverage of other current liabilities 24.70M, indicating strong asset backing.
Cash reserves of 64.44M provide ample 14.26x coverage of acquisition spending 4.52M, enabling strategic growth opportunities.
R&D investment of 12.74M represents healthy 16.14x of deferred revenue 789000, indicating strong future innovation pipeline.
Long-term investments of 54.82M provide solid 0.82x backing of working capital 66.70M, showing strategic capital allocation.

Cons

Investment activities of (9.16M) provide weak support for R&D spending of 12.74M, which is -0.72x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
Operating cash flow of (111.18M) provides insufficient coverage of deferred revenue obligations of 789000, which is -140.92x, raising concerns about future service delivery capabilities.
The company's operating cash flow of (111.18M) shows concerning coverage of stock compensation expenses of 20.59M, with a -5.40 ratio indicating potential earnings quality issues.
Free cash flow of (112.19M) provides weak coverage of capital expenditures of 1.01M, with a -110.97 ratio suggesting additional external financing needs for growth initiatives.
Operating cash flow of (111.18M) provides minimal -805.68x coverage of tax expenses of 138000, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer Comparison

Companies in the Software - Infrastructure

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	MSFT	Microsoft Corp	3,542.10 Bn	33.76	12.06	60.56 Bn
2	ORCL	Oracle Corp	533.93 Bn	34.61	8.75	124.39 Bn
3	PLTR	Palantir Technologies Inc.	437.56 Bn	399.47	112.31	0.24 Bn
4	PANW	Palo Alto Networks Inc	125.16 Bn	112.03	13.10	0.35 Bn
5	CRWD	CrowdStrike Holdings, Inc.	120.85 Bn	-384.67	26.47	0.82 Bn
6	SNPS	Synopsys Inc	71.69 Bn	35.89	11.14	15.14 Bn
7	NET	Cloudflare, Inc.	67.84 Bn	-658.43	33.70	3.50 Bn
8	FTNT	Fortinet, Inc.	63.33 Bn	33.80	9.66	1.00 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	0.19	2.56
EV to Cash from Ops.	-0.44	38.32
EV to Debt	0.00	-11.37
EV to EBIT	-1.19	-12.79
EV to EBITDA	-0.10	7.72
EV to Free Cash Flow [EV/FCF]	-0.43	24.22
EV to Market Cap	0.55	0.58
EV to Revenue	0.01	-35.00
Price to Book Value [P/B]	0.77	3.74
Price to Earnings [P/E]	-2.13	-18.61

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	0.00	-0.30
Dividend Payout Ratio %	0.00	2.69
Dividend per Basic Share	0.00	0.10
FCF Dividend Payout Ratio %	0.00	1.67
Interest Coverage	-818.66	-13.15

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	76.53	-404.11
Cash and Equivalents Growth (1y) %	0.23	226.02
Dividend Growth (1y) %	0.00	-0.27
EBIAT Growth (1y) %	25.59	31.15
EBITDA Growth (1y) %	-1.13	49.02
EBIT Growth (1y) %	25.62	25.85
EBT Growth (1y) %	24.14	17.82
EPS Growth (1y) %	57.38	70.69
FCF Growth (1y) %	-76.08	295.45
Gross Profit Growth (1y) %	-23.37	49.96

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	13.36	0.68
Cash Payout Ratio	0.00	0.02
Cash Ratio	1.20	1.21
Current Ratio	2.24	2.57
Debt to Equity Ratio	0.00	-0.93
Interest Cover Ratio	-818.66	-13.15
Times Interest Earned	-818.66	-13.15

Profitability

Metric	Value	Industry
EBITDA Margin %	-1.10	-544.82
EBIT Margin %	-1.19	-197.78
EBT Margin %	-1.19	-602.74
Gross Margin %	-12.10	52.06
Net Profit Margin %	-1.20	-605.52

Bakkt Holdings, Inc. (NYSE: BKKT)