Exodus Movement: Strong Buy On Robust User Growth And Monetization Potential

Summary We Initiate Strong Buy on Exodus with $93 PT, driven by accelerating user growth and ARPU, outpacing consensus expectations. Exodus’s product mix shift—XO Swap, Passkeys wallet—broadens monetization levers, reducing reliance on volatile trading volumes and boosting recurring revenues. Valuation reflects a premium-growth profile (3.2x FY26E EV/Sales), justified by operational momentum and underappreciated multi-year monetization upside. Key risks: regulatory uncertainty, rising competition, and security threats; however, we see the asymmetric risk/reward as highly attractive at current levels. User Growth Accelerates, Fundamentally Altering the Valuation Landscape for Exodus We initiate on Exodus Movement, Inc. (EXOD) with a Strong Buy rating and $93 PT. Exodus Movement, Inc. is a non-custodial crypto wallet-platform provider, which allows users to manage, exchange, and store digital assets including Bitcoin, Ethereum, and a growing number of altcoins. Underneath the tumultuous sector landscape, Exodus has quickly scaled its MAU base, differentiating itself in a peer group challenged by engagement. Our conviction stems from the fundamental proof-points that accelerating user adoption—45%/35% growth in FY25E/FY26E—and consistent ARPU expansion are driving a top-line trajectory well ahead of consensus. We view the mix-shift, led by XO Swap and nascent traction in Passkeys wallet, as providing the one-two punch that will drive new monetization levers and unlock stickiness in a peer group distracted by crypto volatility. While consensus underestimates the “remaining products” business potential to return to a high-growth profile and dismisses the upside to transaction fees from stablecoins, we bake in both under our bull-case scenario of 46.7%/38.7% revenue growth in FY25E/FY26E. Our 3.2x FY26E EV/Sales multiple reflects the premium-growth profile vs. peers despite a conservative take on ongoing regulatory and volatility risks. While we acknowledge the potential for margin dilution from regulatory fees or material fluctuations in digital-asset activity, we view the scale of operational momentum and growing monetization levers as far outweighing app-specific or macro risks in our model. Ultimately, we view the R/R as asymmetric, with proprietary indicators and user momentum giving us considerable conviction that the street is materially underestimating the embedded upside in Exodus’s growth trajectory. MAU/ARPU Accelerations Bode Well for Multi-Year Monetization Upside Our view is simple: Exodus’s concurrent MAU/ARPU accelerations are secular expansions of the platform’s addressable opportunity set, with underlying drivers portending durable monetization outperformance vs. volatile sector peers. MAU visibilities (+45% FY25E; +35% FY26E) are being driven not only by crypto market recovery, but an aggressive product-led acquisition strategy that is successfully converting on-chain “tourists” and long-term holders into recurring users. Further, MAU trajectory by cohort suggests Exodus’s recent product launches (especially XO Swap & onboarding of Passkeys wallet) have compressed conversion cycles, de-risking revenue recognition from bull-market skew. This network effect is compounding: as transactions increase within the Exodus ecosystem, ARPU not only rises, but becomes less correlated to cyclical volumes (i.e. +19% y/y ARPU in the latest quarter despite muted token volatility). Where consensus models often base ARPU to crypto market volumes, we see incremental wallet features (cross-chain swaps, fiat gateways, and staking) driving sticky and recurring “non-market dependent” revenue. Further, our diligence suggests that Exodus captures a materially higher ARPU than most pure-play wallet competitors (i.e. superior engagement layer & wallet activity per user). With MAU/ARPU accelerations forming a revenue flywheel, Exodus is structurally poised to outperform—an aspect that, we believe, is still materially underappreciated by the street. Product Mix Diversification Broadens Monetization Levers Our Exodus thesis is predicated on the belief that the firm’s changing product mix—led by accelerated scaling of XO Swap, Passkeys wallet, and select ancillary features—meaningfully expands the long-term monetization levers available. We view Exodus’s product mix direction as a purposeful shift away from one-dimensional revenues, with management deliberate in broadening the wallet’s utility layer to embed transactional, yield-earning, and value-added services across the core user workflow. We believe this evolution is material: whereas legacy wallet revenue was closely tied to episodic crypto trade volume spikes, incrementally Exodus is driving cross-chain swap volumes, fiat on-ramps, and staking/delegation services, each with different margin and retention profiles. Moreover, we believe the levers are more complementary than cannibalistic, creating positive network effects on wallet stickiness and transaction frequency. For example, after broadening fiat on-ramps and launching integrated staking, Exodus saw a step-change in non-trading transaction count, with management highlighting a 29% q/q increase in staking-related volume. This both reduces EXOD’s correlation to tradable asset volatility and entrenches the wallet as a financial “hub” for retail/semi-pro users—enabling monetization through recurring fees, spreads, and premium account tiers. With consensus underestimating the upside from these alternative monetization vectors, our diligence shapes a scenario where non-trading revenue composition rises from 21% in the last fiscal year to 34% by FY26E—a critical inflection point driving both revenue durability and positive ARPU momentum. In our view, this diversification is underappreciated and forms the foundation for EXOD’s evolving economic moat. Exodus: Our Above-Consensus Forecast Rooted in MAU Expansion and ARPU Acceleration We model EXOD FY25E/26E revenues of $172.4mn (consensus $124.8mn) and $239.1mn (consensus $193.4mn), respectively, up +46.7%/38.7% y/y. Our optimistic view is based on visibility into MAU acceleration (45%/35% in FY25E/26E vs. consensus ~15% flat) and sustained ARPU uplift (5% p.a. enabled by favorable product mix and early traction in XO Swap/Passkeys wallet). We see consensus understating the MAU run-rate and the “remaining products” segment’s return to high-growth mode post-XO Swap ramp, with limited recognition of stablecoin-driven transaction fee upside. Source: FMP FY25 FY26 Estimate # Analysts Estimate # Analysts Revenue $124.83M 3 $193.35M 4 EBITDA $22.68M 3 $35.13M 4 Net Income $30.74M 3 $62.60M 4 EPS $1.15 1 $1.96 3 SG&A Expenses $41.94M 3 $64.96M 4 We include digital-asset volatility and regulatory headwinds (200-300bp annual revenue haircut), which are well outpaced by strong customer acquisition and visible monetization levers. Bottom line, our Exodus bull case is rooted in operational milestones and proprietary leading indicators that the street has yet to fully appreciate. We caution, however, that this acceleration does not guarantee a positive stock view, as persistent digital-asset volatility and expanding regulatory spend may pressure margins and valuation. Valuation Our $93 PT for EXOD is based on an FY26E EV/Sales multiple of 3.2x applied to our FY26E revenues forecast of $239.1mn (289% implied upside). Our PT multiple balances EXOD’s industry-leading FY26E revenue growth (38.7%), which far exceeds The street consensus and historical baseline, with a prudent premium that accounts for digital-asset volatility and regulatory risks. Our multiple of 3.2x represents a premium to EXOD’s historical median (1.4x, 52nd pctile) and is in line with the current peer group (3.2x, 56th pctile), justified by the clear evidence of accelerating MAU and ARPU trends that are undervalued by The street consensus. Company Data, FMP, Moretus Research Importantly, The street’s bias for headline crypto volatilities masks the compounding effect of EXOD’s user base and monetization levers. This disconnect sets the stage for a sharp re-rating as regulatory noise diminishes. Our multiple is slightly below the prior-year (3.6x) to maintain analytical discipline in the face of sector uncertainty, while positioning ahead of consensus to reflect operational momentum from new products such as XO Swap and Passkeys wallet. In our view, EXOD’s peer-relative discount of -50% is overdone, especially as “remaining products” come back to growth and stablecoin-enabled transactions introduce additional fee streams. In sum, we believe the asymmetric R/R is mispriced, and our methodology captures the multi-year growth story and rising monetization efficiency that consensus models systematically underestimate. Downside Risks to Our Strong Buy In spite of our high-conviction thesis, we acknowledge that EXOD’s bull case is susceptible to a number of downside risks that could challenge our growth / valuation thesis. Most notably, we see broader regulatory uncertainty in global digital asset markets (e.g., classifications of tokens as securities, increased compliance requirements) as the most significant threat to our growth thesis, potentially leading to cost inflation and/or product de-listings that would drive expectations for revenue and ARPU upside to disappoint. This could also result in quarterly volatility. On the growth side, EXOD’s reliance on accelerating user momentum is tangibly threatened by increasing wallet competitors (e.g. MetaMask, hardware options like Trezor / Ledger) rapidly iterating on product / services and gaining share in a market with low switching costs. On tech, ongoing threats of phishing, supply chain and hot-wallet hacks present risk to the platform’s reputation and finances, given security features still a few years behind best-in-class (2FA, multi-sig). We believe investors should watch closely for any changes in MAU trends, digital-asset regulatory developments (especially stablecoins / staking), and gross margin / user stickiness deterioration. Any material deviation from modeled user / revenue growth or uptick in security incidents could trigger a rerating below our premium multiple. We model baseline levels of platform volatility and regulatory headwinds into our assumptions, but further deterioration in the drivers above could impair visibility on EXOD’s multi-year growth trajectory and erode the asymmetric risk / reward embedded in the stock. Conclusion We believe Exodus Movement, Inc. represents an asymmetric risk/reward profile that is materially mispriced by the market, fueled by a combination of incredible user growth and monetization levers that drive operational momentum far above consensus. In our view, the mix of accelerating MAUs, strong ARPU uplift, and new product traction should drive a sharp rerating for EXOD as regulatory overhangs fade and Street skepticism is replaced by visible execution. We see this as an attractive entry point for investors who can look beyond the short-term crypto volatility and focus on the multi-year structural drivers—tracking MAU trends and regulatory outcomes will be key to realizing this overlooked upside.

Source: Seeking Alpha