Metaplex: Criminally Undervalued

The MPLX token is down 37% since January 2024, trading at levels similar to the end of August when the wider market crashed. This most recent downturn also happened during a wider market bout and may present a compelling opportunity for longer-term investors. 

At the same time, Metaplex is enjoying record-high revenues as November was the protocol’s best month ever, capturing $3.5M in fees. This was largely due to 1.4M new fungible tokens being created through Metaplex, an all-time high and 56% increase MoM. And while not a consumer-facing protocol, Metaplex is the 5th most used protocol on Solana, with ~880K unique wallets signing transactions in November, an all-time high. This was due to memecoin activity and solidified fungible token mints as the main offering (1.4M FTs vs 94K NFTs). As it stands, December is shaping up to be the second-best month with $2.1M in fees already recorded. Below we show the protocol fees by month for 2024. 

As a reminder, 50% of protocol fees are used to repurchase MPLX tokens from the market. Given November’s record fees, we also saw 12K SOL used to repurchase 6.8M MPLX tokens, a record repurchase. 

However, despite the strong fundamentals, the token’s performance hasn’t reflected these achievements. Metaplex is now trading at a P/E of ~7.2x, the lowest since March 2024 when the token was trading at $0.13. For context, the S&P500 trades at a 30x multiple, and the few crypto protocols that do have earnings tend to trade somewhere in the triple-digit region. Below we show the P/E ratio for Metaplex for 2024.