Bullish (BLSH): Is This Crypto-Infrastructure Play Undervalued Amid Volatility?

In the wake of sector-wide selloffs and heightened volatility in the crypto infrastructure space, Bullish (BLSH) has emerged as a focal point for value investors seeking opportunities amid the turbulence. The company's Q3 2025 results, marked by robust revenue growth and EBITDA expansion, have sparked debates about its valuation and long-term potential. This analysis examines whether Bullish's current price reflects its fundamentals or if the market is underestimating its strategic momentum.

Q3 2025: A Snapshot of Growth and Resilience

Bullish reported adjusted revenue of $76.5 million for Q3 2025, a 71.5% year-over-year increase, driven by the launch of crypto options trading and U.S. spot trading services. Adjusted EBITDA surged to $28.6 million, up from $7.7 million in the same period in 2024. While the company's gross margin stood at 4% and net margin at -17%, these figures mask a broader narrative of liquidity strength and operational scalability. Bullish's current ratio of 24.59 and quick ratio of 22.75 underscore its ability to meet short-term obligations, while a debt-to-equity ratio of 0.23 and an Altman Z-Score of 62.75 signal strong financial health.

The company's strategic expansion-such as doubling liquidity services partnerships in Q3-further positions it to capitalize on the growing demand for institutional-grade crypto infrastructure. However, JPMorgan analysts have revised their 2025 adjusted EPS estimate downward to $0.31 from $0.44, citing the exclusion of high-margin stablecoin promotion income from IPO proceeds. This adjustment, while conservative, highlights the need to focus on sustainable earnings rather than one-time gains.

EBITDA Expansion: A Path to Profitability?

Bullish's EBITDA margin of 37.4% (calculated from Q3 results) is impressive, but its net margin remains negative. This discrepancy raises questions about cost management and scalability. In contrast, Construction Partners, Inc. (ROAD) has outlined a roadmap to expand EBITDA margins to 17% by 2030 through operational efficiencies, while Magnera (MAGN) targets 9% EBITDA growth in 2026 via cost rationalization. For Bullish, the key will be translating its EBITDA gains into net profitability by optimizing operating expenses.

The company's Q4 2025 guidance-$47–$53 million in subscription and services revenue and $48–$50 million in adjusted operating expenses-suggests a cautious approach to cost control. If Bullish can maintain or reduce its operating expense ratio while scaling revenue, it could see meaningful EBITDA margin expansion. However, JPMorgan's revised estimates imply skepticism about the sustainability of its current margins, particularly as the market volatility that boosted Q3 trading volumes may not persist.

Valuation: A Tale of Two Narratives

Bullish's stock price has fallen nearly 40% in a month, trading below its $37 IPO price at $35–$36 according to Blockonomi. This decline contrasts with its strong financial performance, raising the question: Is the stock undervalued? To assess this, we compare Bullish's valuation metrics to industry averages.

While direct P/E and P/EBITDA ratios for Bullish are not provided in the sources, JPMorgan's adjusted 2025 EPS of $0.31 implies a P/E ratio of approximately 112x at current prices. This appears elevated compared to the crypto infrastructure sector's average EV/Revenue multiple of 9.4x, though it aligns with the high valuations often seen in early-stage fintech companies. Meanwhile, Bullish's EBITDA of $28.6 million (assuming a market cap of $3.5 billion) yields a P/EBITDA ratio of roughly 122x, which is significantly higher than the 18.3x average for capital markets platforms according to FinrofCA.

The disconnect between Bullish's multiples and industry benchmarks suggests a market that is either overpaying for speculative growth or undervaluing the company's long-term potential. For value investors, the key lies in Bullish's ability to convert its EBITDA into net income and sustain its revenue growth without relying on one-time income streams.

Conclusion: A High-Risk, High-Reward Proposition

Bullish's Q3 results demonstrate its capacity to scale revenue and EBITDA in a volatile market, but its valuation remains a double-edged sword. The company's strong liquidity and strategic expansion efforts are positives, yet its reliance on non-recurring income and negative net margins pose risks. JPMorgan's "Neutral" rating and reduced price target reflect these uncertainties, but the firm also acknowledges stronger Q4 trends that could improve Bullish's outlook.

For investors willing to tolerate short-term volatility, Bullish's current valuation may offer an entry point if the company can execute on its EBITDA expansion targets and improve net profitability. However, the crypto infrastructure sector's inherent volatility and regulatory uncertainties mean that this is not a low-risk bet. As the market continues to evolve, Bullish's ability to balance growth with profitability will be critical to unlocking its true value.