Bullish's Q3 Turnaround Contrasts with 8% Stock Drop as Analysts Warn of Crypto Volatility

Bullish's stock faced mixed reactions this week following its third-quarter earnings report, as the crypto trading platform navigated a challenging market environment and shifting analyst sentiment. The company posted a net income of $18.5 million in Q3, a dramatic turnaround from a $67.3 million loss in the same period last year, driven by adjusted revenue of $76.5 million and adjusted EBITDA of $28.6 million. Despite the strong financial performance, BLSH shares fell 8% on Wednesday, according to The Block, as analysts highlighted volatility in crypto markets and mixed revenue streams.

Deutsche Bank analysts upgraded Bullish to "Buy" from "Hold" in the wake of the earnings report, citing an improved risk/return profile. The firm noted that Bullish's shares, which had dropped over 50% from their mid-August peak, now trade at 31 times its 2027 earnings estimate, a valuation it deems compelling. However, the upgrade came with a reduced price target of $51 from $52, reflecting broader market headwinds. The analysts emphasized Bullish's strategic wins, including securing five of six U.S. exchange-traded product launches and a partnership with Deutsche Bank.

The earnings report also revealed Bullish's expansion into options trading, which generated over $1 billion in volume during the quarter. Assets under management tied to its CoinDesk indices rose to $49 billion, up from $41 billion in the prior quarter. Yet, challenges persist: October perpetual futures spreads turned negative, and options trading returns were described as "choppy" by VanEck's Matt Sigel. Cantor Fitzgerald analysts maintained an "overweight" rating but lowered their price target to $56 from $59, citing a broader decline in crypto valuations and reduced multiples for peers.

Bullish's performance comes amid broader sector turbulence.

Bitcoin prices have retreated to around $89,000, down from a $125,000 peak in early October, exacerbating market jitters. The company's IPO in August, which raised $1.11 billion, initially saw shares surge to over $93 but have since traded below the $37 offering price. Institutional interest remains a key focus, with Cathie Wood's Ark Invest recently purchasing $10.2 million in Bullish shares across three ETFs.

Meanwhile, other tech and financial developments underscored a volatile market backdrop. IonQ named Niccolo de Masi as its new CEO, signaling a strategic shift as it navigates competitive pressures and regulatory uncertainties. Separately, Rivers Enterprise Borrower, LLC completed a $991 million recapitalization of its Pittsburgh casino, highlighting ongoing capital reallocation in the gaming sector.