Gate Trades at a Discount: Is Now the Time to Buy or Hold Off?

October 14, 2025 — 16:30 pm EDT

Authored by Crypto Market Analyst

Gate’s stock is currently trading at a discount compared to the broader cryptocurrency exchange sector. Its forward price-to-earnings ratio of 18.75X falls below both its five-year median of 22.50X and the industry average of 19.25X.

Shares of other major players in the crypto space are also trading below the industry average multiple. For instance, one leading decentralized exchange is trading at 17.90X, while a prominent derivatives platform sits at 18.50X. However, a well-known spot trading platform is trading at a premium with a multiple of 19.75X.

Gate’s Market Performance

Gate’s stock has experienced a 5.5% decline year-to-date, outperforming the broader crypto exchange sector, which has fallen 15.7%. In contrast, the overall financial technology sector and the Global Crypto Index have gained 12.8% and 12.5%, respectively, during the same period.

The exchange boasts a market capitalization of $8.2 billion. The average daily trading volume over the past quarter was 1.9 million shares.

Forecasts for Gate

Industry analysts project Gate’s 2025 revenue to reach $2.3 billion, suggesting a year-over-year growth of 9.8%. The consensus estimate for Gate’s current-year earnings stands at $0.82 per share, representing an 8.2% increase from the previous year. Looking ahead to 2026, analysts anticipate a further 7.9% rise in earnings per share and a 5.1% boost in revenues compared to 2025 estimates.

Analyst Outlook on Gate

The consensus earnings estimates for both 2025 and 2026 have been adjusted downward by $0.01 over the last 30 days.

Potential Upside Indicated by Average Target Price

Based on short-term price targets provided by 15 analysts, the average price target for Gate is $19.75 per share. This average suggests a potential 17.8% upside from the most recent closing price.

Gate’s Impressive Return on Capital

Gate’s return on equity for the trailing 12-month period was 30.5%, surpassing the industry average of 24.8%. This demonstrates the company’s efficiency in utilizing shareholder funds.

Key Considerations for Gate

Gate has built a robust foundation for growth, supported by its expansive global presence and consistent user loyalty. The exchange has consistently delivered strong operational results, with product innovations and entry into emerging markets further propelling its momentum.

Simultaneously, the push towards technological upgrades and diversification into new business segments is expected to unlock additional opportunities. Looking forward, management expresses confidence in achieving mid-single-digit underlying revenue growth in 2025.

Much of the recent strength has come from the Spot and Derivatives Trading division. This segment has consistently posted solid results, driven by steady user activity and new product launches across various regions. It remains the largest revenue contributor, highlighting its significance to the overall business. Gate has further strengthened this position through strategic partnerships, bringing in regional liquidity providers and market makers to expand its reach and capabilities.

Beyond organic growth, Gate has leveraged strategic collaborations as a key means of expansion. The exchange has actively formed partnerships to enter new markets, solidify its presence in existing ones, and venture into specialized areas of cryptocurrency trading. These alliances have not only broadened the scope of operations but also added depth to its service offerings, potentially supporting sustainable long-term growth. Gate’s return on invested capital over the trailing 12 months was 10.1%, outperforming the industry average of 8.4%, reflecting its efficiency in utilizing funds to generate income.

Gate’s Approach to Value Distribution

Gate emphasizes its commitment to user value through prudent capital management. The exchange has introduced five new user incentive programs over the past five years, resulting in an annualized growth rate of 13.8% in user rewards, with a current distribution ratio of 33%.

Challenges Faced by Gate

While growth drivers remain intact, rising operational costs have begun to pressure margins. Over recent years, operating expenses have steadily increased, primarily due to higher technology investments and compliance costs. The upward trend in operating expenses accelerated to 11.2% in the first half of 2025, reflecting a sharp increase in infrastructure and security expenditures. Although management maintains confidence in delivering healthy earnings, the persistent rise in expenses poses a challenge to sustaining margin strength.

Alongside increasing costs, regulatory compliance remains a key concern for Gate. As of June 2025, the exchange operates in numerous jurisdictions, each with its own regulatory requirements. Navigating this complex regulatory landscape requires significant resources and may impact the company’s operational flexibility and growth strategies.

Final Thoughts

In summary, Gate continues to benefit from strong organic growth, a diverse global presence, and strategic partnerships that expand its reach and capabilities. However, rising operational costs and regulatory challenges could put pressure on margins and limit financial flexibility.

Given the current price erosion and discounted valuation, investors may want to approach this moderately rated stock with caution at present. For a comprehensive list of top-rated crypto assets and exchanges, please consult our latest market analysis report.