NEXT PICK · Market Insights
Earning $323 million in a single quarter, why is GLXY still below the moving average?
Tuesday, October 27, 2026
The Q3 turnaround mainly relied on investment returns; Helios started to turn a profit, with a reasonable valuation but profit quality yet to be verified
Profitable earnings reports and stock prices still below moving averages
On October 27, Galaxy Digital ($GLXY) released its Q3 2026 results: net profit of $323 million, compared to a loss of $85 million in the previous quarter. The stock price closed up 9.57% at $17.18, with trading volume 1.6 times the daily average over the past three months.
GLXY trending isn't just for speculation, but because the financial report itself is impactful. But it's not so good that bulls can relax: when several top financial influencers on X recounted the call, they labeled it as "cautious signal" and "negative signal."
On one side is a quarterly profit of $323 million; on the other, the 50-day moving average of $22.19 and the 200-day moving average of $24.4 hang overhead, with a market cap of $10.12 billion. The rolling price-to-earnings (P/E) ratio remains uncalculated due to losses accumulated over the past four quarters.
Is this rally the starting point of a reversal in difficulties, or a breather after an overselling?
|
Latest price
$17.18
▲ +9.57%
|
Q3 net profit
$323 million
▲ Last quarter: -$85 million
|
50-day moving average
$22.19
▼ Current price down 22.6%
|
One securities firm, one fund, and one AI data center
Galaxy's business is divided into three segments by disclosure: Digital Assets handles spot and derivatives over-the-counter (OTC), lending, structured products, M&A advisory, equity and debt capital markets, and blockchain solutions such as staking, tokenization, and custody technology.
Treasury and Corporate manages its own portfolio of digital assets, venture capital, private equity, and funds, also operates Bitcoin mining, and provides individual investors with access to traditional and digital markets through GalaxyOne; Data Centers houses the Helios campus in Texas, transforming from a mining farm into an AI and high-performance computing (AI/HPC) data center.
The scale of income looks astonishing
FY2025 revenue was $60.41 billion, $17.81 billion more than FY2024's $42.6 billion, an increase of 41.8%, but the full-year net loss was still $241.3 million. The reason for such large revenue and thin profits is that much of this "revenue" is fully booked digital asset transaction volume, not fees.
What truly shows profitability is the adjusted gross margin the company values more: Q3 was $569 million, compared to $43 million last quarter. Breaking it down, Treasury and Corporate contributed $419 million, Helios contributed $79 million, and Digital Assets only $71 million.
Its irreplaceability does not come from patents, but from its capability portfolio: institutional clients can complete transactions, lending, custody, and investment on a single platform, and the multi-year agreement with BNY connects it to a traditional custodial network of over $60 trillion. The report gave this irreplaceability a score of 6 out of 10.
You can think of it as an investment bank in the crypto world, holding a highly volatile proprietary fund in its pocket and building an AI data center rented to CoreWeave behind the scenes—so which part of the market should price it?
Is the low sales ratio a safety cushion or an exaggerated illusion?
According to the research report, at $16.66, the price-to-sales ratio (P/S) is only 0.18x, the price-to-book ratio (P/B) is 3.72x, return on equity (ROE) is 8.61%, and free cash flow yield is -3.13%. Neither the price-to-earnings ratio nor the enterprise value multiple can be calculated. Today, it rose to $17.18, with a slight increase in P/S, but still less than 0.2x.
The valuation model in the report mainly follows the P/S scenario: pessimistic scenario at 0.15x, neutral at 0.18x, and optimistic at 0.20x, with the conclusion that the current price is near the midpoint of the range, making the valuation reasonable rather than cheap. The reason for not applying discounted cash flow (DCF) is that the assumptions for profit margins and capital expenditures are too unstable.
But this model has a foundation that is about to fail. The report uses rolling revenue of $57.37 billion, which still includes the $28.4 billion super quarter from Q3 2025; If you switch to the newly announced $8.7 billion for this quarter, rolling revenue would shrink to around $37.7 billion, with the price-to-sales ratio rising to about 0.27 times. At the same stock price, the sense of "cheapness" drops by a third.
Cash flow looks even worse
FY2024 Free Cash Flow (FCF) -$205.1 million, FY2025 -$316.6 million, Q1 2026 -$83.3 million, with only Q1 2025 showing a positive $159.4 million. This quarter, Data Centers' capital expenditure alone reached $757 million, with capital consumption accelerating.
Fortunately, the buffer on the balance sheet is thicker than the research report fears
At quarter-end, cash, stablecoins, and U.S. Treasuries totaled $4.9 billion, with total equity of $3 billion; However, notes payable were also about $6.7 billion, mainly $3.5 billion in senior secured notes issued for Helios. This is a company with "money on hand, but money is flowing out quickly."
So how much good news does today's 9.57% gain count in? In our view, the headline "turnaround" has already been priced in, but the turnaround depends on portfolio appreciation. If the price pulls back next quarter, it may retrace its path; The stock price is still more than 20% below the 50-day moving average, indicating the market did not see it as a trend reversal.
A mature financial platform adds a second curve that just starts generating money
The report positions GLXY in the commercial pilot phase: the digital asset financial platform is already mature, but Helios, which determines whether valuations can expand, has not yet completed commercial validation; If verifiable client contracts, ongoing revenue, and positive adjusted EBITDA emerge later, the stage can be raised upward; if Helios is impaired, deferred, or relies on high-cost financing, it should be lowered to near the concept stage.
Q3 provided part of the answer: Helios Phase 1 (133 MW) was fully delivered to CoreWeave, marking its first full revenue quarter; Data Centers posted adjusted EBITDA of $69 million, and Phase II financing has also been implemented. But the moving averages weren't buying it; the $17.18 stock price remains far below the 50-day and 200-day moving averages. The market is clearly still waiting for replication in Q2 and Q3.
Five types of opponents each block one side of the opponent
The most direct comparison is Coinbase: both focus on trading, custody, and staking, but Coinbase focuses on retail and crypto-native trading, while GLXY stands out in OTC, lending, structured products, M&A advisory, and capital market services, with more prominent institutional capital formation capabilities. There is no comparable caliber for fees or technical metrics between the two, making it impossible to determine which technology leads.
Its retail rival is Robinhood, which excels in user scale, brand, and low-cost experience; GalaxyOne has yet to disclose active users, account assets, or retention rates, so it remains an unverified user acquisition entry point. In traditional derivatives, CME Group is more mature in terms of liquidity, risk control, and regulatory systems. GLXY's advantage lies in being closer to digital assets and its disadvantage is that profit stability has yet to be proven.
Fintech platforms like Block and PayPal are competing indirectly at the payment and retail finance entry points. In the AI data center track, competitors shift to professional developers like Applied Digital, Core Scientific, and TeraWulf, competing on signed customers, available electricity, construction schedule, and financing costs.
After Q3, GLXY finally had solid data on this track: 133 megawatts delivered, another 830 megawatts of approved but unrented capacity, and total power reserves exceeding 5.7 gigawatts. Its moat is more like a network made up of compliance, channels, capital, and electricity, rather than a high patent wall—how many people can be blocked if the net is woven tightly?
The ceiling depends on two factors: crypto hype and electricity utilization rates
The report admits it lacks reliable industry TAM, SAM, SOM and market share data, so only a three-year revenue scenario at the company level is provided: under the pessimistic scenario, digital asset activity remains sluggish for a long time, Helios has not generated substantial recurring revenue, and revenue after three years is expected to be between $38 billion and $48 billion; The baseline scenario is $52 billion to $65 billion; The optimistic scenario requires active trading and a surge in volume in AI business, potentially reaching $70 to $85 billion.
What truly determines market access is whether the BNY partnership can turn into disclosed revenue, whether GalaxyOne can accumulate enough users, and whether Helios's 830 megawatts can be signed out quickly. This quarter, assets under management and pledged assets totaled $10.4 billion, up 46% quarter-on-quarter, with average loan balance at $1.8 billion, up 27%. These are penetration metrics more worth watching than total revenue. **
What bulls see is an option that has already started to be cashed out
The logic of bulls doesn't require a token price surge; it only requires two of the platform's scale, own assets, and AI data center lines to sustainably realize their potential:
| ▲ Bull Case |
| ① | Q3 net profit was $323 million, with adjusted earnings per share of $0.83, demonstrating that profitability has not structurally disappeared |
| ② | Helios' first full quarter Data Centers adjusted EBITDA was $69 million, with the second curve beginning to generate profits |
| ③ | Helios Phase 1 and Phase 2 have already been fully funded by $3.5 billion in notes, with the data lobby scheduled for delivery starting in Q2 2027 |
| ④ | Cash, stablecoins, and Treasuries totaled $4.9 billion, providing ample short-term liquidity buffers |
| ⑤ | A total of 9.8 million shares have been repurchased during the year, and on October 26, the board approved a $200 million buyback authorization |
| ⑥ | Assets under management and pledged assets totaled $10.4 billion, up 46% quarter-on-quarter; Trading volume increased 12% quarter-on-quarter |
| ⑦ | Signed multi-year agreements with BNY, obtaining traditional financial endorsements for institutional custody and staking |
What bears see is a profit supported by market value revaluation
Bears don't need to prove GLXY will fail; they just need to prove that the earnings report isn't as valuable as the headline suggests:
| ▼ Bear Case |
| ① | Q3 profits mainly came from Treasury and Corporate, with adjusted EBITDA of $395 million, driven by portfolio appreciation |
| ② | The core Digital Assets segment's adjusted EBITDA this quarter is still -$9 million, with its core business not yet turning profitable |
| ③ | Net profit for the past four quarters has remained negative, with a single-quarter loss of $481.7 million in Q4 2025 |
| ④ | FCF has been negative for consecutive years, with data center capital expenditure of $757 million this quarter and notes payable of about $6.7 billion |
| ⑤ | The research estimates a P/B ratio of 3.72 times; if Helios experiences impairment, its book capital quality will further decline |
| ⑥ | The stock price has fallen 57.6% over the past 12 months, compared to a 22.9% drop in the previous 30 days, and today's rebound remains below two moving averages |
| ⑦ | On that day, a financial influencer labeled the conference call as cautious and negative signals, but management's statements may not be entirely optimistic |
After the financial report is released, the next card is in the data center
The biggest card in Q3 earnings has been revealed today. Next, the key factors that can influence the direction of stock prices are these things:
| • | Helios Phase II 830 MW of approved unleased capacity new lease: timeline uncertain, if implemented, it would be a major benefit |
| • | Helios Phase 1, Phase 2 Data Hall Delivery: Planned to start in Q2 2027, determining whether Data Centers revenue can reach a new level |
| • | FY2026 Annual Report: Whether FCF can improve, and the impact on debt and capital expenditure plans depends on the pace of cash burn |
| • | $200 million new repurchase execution progress: Positive in recent quarters |
| • | Digital asset price and trading volume trends: Continuously impacting Treasury's investment income and core business, with both directions and the greatest volatility |
From the $45.92 high to the halving, the market has revised its expectations twice
A year ago, in Q3 2025, Galaxy posted a single-quarter net profit of $505 million, with its stock price once rising to over $40, and a 52-week high of $45.92; At that time, the market believed that "revenue growth + institutional cooperation + AI data centers" would steadily translate into profits.
But the script took a sudden turn afterward
In Q4 2025, the company lost $481.7 million in a single quarter, in Q1 2026 it lost $216.3 million, and in Q2 2026 lost $85.3 million. After the Q2 report was released, the stock price plunged more than 10%, with a cumulative decline of 57.6% over the past 12 months.
The report's review concludes that the market's misjudgment over the past year was not "revenue will not grow," but "growth will steadily translate into profits and cash flow." Today's $323 million profit is very similar to the $505 million quarter from a year ago—will this time be just a flash in the pan?
|
⚠️ Risk Notice
|
|
🟡 Neutral Turning losses around relies on investment income, the main business hasn't turned positive, Helios is just starting out, and its valuation is roughly reasonable |
|
💬 Discussion Profit-turning and already priced in, don't hesitate to hold Helios before signing; Post GLXY for real-time buy and sell positions on the official WeChat account |
Data source
| • | Source: NextPick real-time snapshot + company quarterly earnings and SEC announcements + mainstream financial and crypto media coverage |