BTBT

We rate Bit Digital, Inc (BTBT) as Avoid with a composite score of 34.9/100 at a current price of $1.68. The stock falls in the bottom quintile of our universe across key quantitative factors, and the multi-factor weakness suggests a high probability of continued underperformance.

The rating is primarily driven by strength in quality (68th percentile) and value (25th percentile), which together account for the majority of the composite score. Offsetting weakness in stability (8th percentile) and momentum (9th percentile) tempers our overall conviction. We assign a Narrow Moat rating (45/100), High uncertainty, and Exemplary capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs; sustainability of the current growth rate; valuation compression risk if growth disappoints. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Bit Digital, Inc holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 34.9/100 places it at rank #4114 in our full 7,333-stock universe. At N/A in market capitalization, Bit Digital, Inc is a small-cap player in the Finance, Insurance, And Real Estate space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 33%, though momentum at the 9th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 60% (-16.5pp vs sector) narrow to operating margins of 465% (+448.5pp vs sector) and net margins of 481.6%, yielding a gross-to-net conversion rate of 803%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $1.68, Bit Digital, Inc is trading at a premium to fundamental value. Our value factor score of 25/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The premium valuation implies the market is pricing in significant future growth or quality improvements that are not yet fully reflected in current fundamentals.

The stock currently trades at a P/E of 3.5x (a 71% discount to the sector median of 11.9x), EV/EBITDA of 0.9x (discounted to peers), P/B of 0.5x, P/S of 4.4x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a High uncertainty rating to Bit Digital, Inc. Key risk factors include elevated market sensitivity (beta of 1.83), below-average price stability (8th percentile). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 1.83); below-average price stability (8th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 8th percentile and quality factor at the 68th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 60% provide a buffer against cost pressures; conservative leverage (8% D/E) limits balance sheet risk. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate Bit Digital, Inc's capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 56.1%, disciplined leverage (8% D/E), best-in-class net margins of 481.6%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — Bit Digital, Inc meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. We note that the combination of 51.8% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, Bit Digital, Inc receives a Avoid rating with a composite score of 34.9/100 (rank #4114 of 7,333). Our quantitative framework assigns a Narrow Moat (45/100, trend: stable), High uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 26/100.

Our analysis does not support a constructive view on Bit Digital, Inc at this time. The combination of the current quantitative profile, high uncertainty, and exemplary capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.