Analyst: PUMP may be undervalued in the short term, but long-term value absorption still faces uncertainty.

BlockBeats news, September 11: Blockworks analyst Shaunda Devens published a piece examining whether PUMP is "undervalued" or "lacking value," arguing that PumpFun's business fundamentals are undervalued by the market, but whether PUMP can capture the company's value over the long term remains uncertain. Currently, PumpFun's annualized revenue is approximately $677 million, and PUMP's price-to-sales ratio is about 2.8x, lower than comparable revenue-generating tokens.

PumpFun allocates 50% of protocol revenue to programmatic buybacks and burning of PUMP, which at current revenue and prices equates to buying back approximately 17.6% of circulating supply annually; about 77% of tokens already allocated to the team and investors remain unmoved. These factors may alleviate short-term supply pressure from insider selling and token unlocks.

However, PUMP's official documents explicitly state that the token does not represent equity in PumpFun, nor does it grant holders rights to revenue, profits, dividends, or cash flows; PumpFun's approximately $2 billion treasury belongs to Baton Corp, not PUMP holders. The existing programmatic buyback arrangement expires in April 2027, and whether it will be extended remains uncertain.

Under a base-case scenario, PUMP's valuation range is $0.0108 to $0.0205, approximately 2.3x to 4.4x higher than the September 9 price; however, if business activity declines and valuations continue to contract, the price could also fall 59% to 76%. Therefore, the conclusion is that PUMP may be undervalued in the short term, but its long-term value depends on whether buybacks can continue and whether the project team further clarifies the alignment of interests between the token and the company's business.