Who is the CEO of SMLR stock?

When enterprise software company MicroStrategy began buying bitcoin in substantial quantities a few years ago, there were plenty of outsiders who questioned the move. However, the company’s massive bitcoin stake sent Microstrategy shares soaring after crypto surged this year.

While Microstrategy might have seemed like an outlier, other companies are starting to follow in its footsteps. Medical device maker Semler Scientific (NASDAQ: SMLR) was best known for building a device that diagnoses cardiovascular conditions before it went on a bitcoin buying spree earlier this year.

After an initial $40 million purchase in May, the company has continued to buy bitcoin. Though SMLR got a boost after the announcement of the company’s crypto play, Semler’s plan hasn’t played out like MicroStrategy’s just yet. SMLR is down 46.8% year-to-date while Microstrategy shares have soared over 142%.

While Semler Scientific isn’t sailing into uncharted waters, the company’s sudden shift to bitcoin might make investors wonder if Semler had a recent change in leadership. They might also wonder if the company’s CEO has ties to MicroStrategy or is trying to emulate that company’s success.

So who is the CEO of Semler Scientific?

Who Is the CEO of SMLR Stock?

In March of 2023, it was announced that Dr. Wayne T. Pan was appointed as the CEO of Semler Scientific. However, just a few weeks afterward, former CEO Doug Murphy-Chutorian stepped back in and took the reins. It’s unclear if the company’s bitcoin strategy played any part in the CEO switch-up.

Both Pan and Murphy-Chutorian come from strong healthcare backgrounds, and there is no indication that either man had previous cryptocurrency experience or any ties to MicroStrategy.

When Semler announced that it was going to make bitcoin its primary treasury asset earlier this year, the explanation for the move came from not from Murphy-Chutorian, but from Chairman of the Board Eric Semler.

“Our bitcoin treasury strategy and purchase of bitcoin underscore our belief that bitcoin is a reliable store of value and a compelling investment,” said Semler Scientific Chairman Eric Semler. “Bitcoin is now a major asset class with more than $1 trillion of market value. We believe it has unique characteristics as a scarce and finite asset that can serve as a reasonable inflation hedge and safe haven amid global instability.”

“We also believe its digital, architectural resilience makes it preferable to gold, which has a market value of approximately 10 times that of bitcoin,” Semler continued. “Given the gap in value between gold and bitcoin, we believe that bitcoin has the potential to generate outsized returns as it gains increasing acceptance as digital gold.”

The company quickly followed through on its plan. By the end of the second quarter, Semler had spent $63 million to buy 929 bitcoin, a stake which is currently valued around $60.6 million. In just over a month, Semler Scientific become one of the world’s largest bitcoin-holding businesses, excluding bitcoin miners.

SMLR was up over 75% in the weeks following the announcement, but all of those gains have since eroded away. It could be that the company’s new bitcoin dependence played a part . Bitcoin is down almost 6% since May.

Will SMLR Stock Go Back Up?

The drop may also be attributed to concerns about the company’s core business. Semler’s Q2 revenue of $14.5 million was 22% less than last year’s $18.6 million and also over 22% lower than the figure analysts had forecast.

Net income of $11,000 was a near 100% decline from the $5.9 million that Semler reported last year. Even still, the company’s flat earnings per share were better than expected.

Management reiterated that the main business of the firm is still healthcare, though it remains “laser-focused on acquiring and holding bitcoin.”.

Semler’s main product is its QuantaFlo blood flow testing device, which is used to diagnose peripheral arterial disease. QuantaFlo may soon get FDA approval to diagnose other cardiovascular diseases.

Analysts Ratings for SMLR Stock

While the company insists it is a healthcare company, its massive bitcoin strategy will continue to dominate investors’ attention. That might mean Semler shares may be affected by bitcoin’s price, regardless of the company’s healthcare ventures.

So far, Wall Street has been largely unwilling to speculate on how Semler Scientific stock will fare. There is only one analyst who has rated the stock and labeled it a Buy.

The analyst set a price target of $40 per share, which if it comes to fruition, would represent a 70% increase from where SMLR currently trades.

Is SMLR Stock Undervalued?

The lone analyst believes SMLR has room to rise, and that’s not out of the realm of possibility. Semler shares soared to $150 per share in 2021, and the stock traded over $50 earlier this year.

SMLR has a price-to-sales value of 3.4, which makes the stock look fairly cheap but the unique business model means there isn’t a 1:1 comparison for the stock.

MicroStrategy’s P/S multiple has soared to 48.42x, but the share price has skyrocketed due to its bitcoin holdings instead of its revenue.

Is SMLR Stock a Buy or Sell?

MicroStrategy also has far more bitcoin than Semler. The software company had 226,500 bitcoin at the end of the second quarter, which were purchased at a cost of $8.3 billion, or $36,821 per bitcoin. That investment is now worth approximately $14.7 billion.

MicroStrategy has such a massive bitcoin stake that the company has begun to loan crypto out. MicroStrategy has achieved a “bitcoin yield” of 12.2% year-to-date. It’s not clear if Semler will pursue the same strategy in the months and years to come.

Semler Scientific remains committed to its medical business despite its crypto efforts. The company underperformed on revenue in Q2 and most of its cash is now tied up in bitcoin. That is a gamble that could pay off, much as it has for MicroStrategy.

However, there is still variability about the future of bitcoin due to an uncertain regulatory environment. For better or for worse, Semler’s ship will likely rise and fall on bitcoin’s tide.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.