Bakkt, Inc.

Where It Passes

Where It Falls Short

• Cash Flow0% pass✗ 12▾

  All 10 investors flag BKKT's cash flow

  Free Cash Flow Proxy$-47.8M

  ✗BuffettPositive and growing

  FCF Positive and Growing$-24.3M

  ✗LynchPositive and growing

  Operating Cash Flow$-153.4M

  ✗PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=-94.23%, ROA=-65.86%

  ✗PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)N/A (negative CFPS)

  ✗Dreman< 8x

  P/E or FCF Yield

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive0/4 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap

  ✗Ackman>= 4%

  Price / FCF per Share

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency0/5 years positive

  ✗SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section
• Profitability6% pass✓ 4✗ 31▾

  15 of 16 flag BKKT's profitability — Graham, Buffett, Lynch +12 more

  Positive EPS (10 years)0/7 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)0/7 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-247.1%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)-6.3% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-47.8M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE-0.5%

  ✗Lynch> 15%

  Net Income / Total Assets-65.86%

  ✗PiotroskiROA > 0

  ROA Change YoY-17.32% -> -65.86% (delta: -48.54%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=-94.23%, ROA=-65.86%

  ✗PiotroskiCFO/Assets > ROA

  Pre-Tax Income / Revenue-4.2%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity-0.5%

  ✗Dreman> 12%

  Return on Equity-0.5%

  ✗Munger> 15%✗AkreROE > 20% (3-year avg)

  Margin of SafetyP/TBV=1.0x

  ✓PabraiP/TBV < 1.5 or P/E < 15

  ROE (high and growing)FY2023: ROE=-155.0%; FY2024: ROE=-137.7%; FY2025: ROE=-95.1%

  ✗AkreLatest 3 consecutive FYs: ROE > 15% in each

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency0/5 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue-6.3%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity-0.5%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend-21.5% (2023) -> -6.3% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin -21.5% -> -6.3%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  ROE (5-year)0/4 years above 12% (latest -95.1%)

  ✗SleepROE > 12% in a majority of years

  Net income / market capitalization-1.03%; #3409/6340 (top 53.8%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity-0.49%; #2952/5226 (top 56.5%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.4285; #4848/5884 (top 82.4%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Valuation8% pass✓ 10✗ 16▾

  11 of 12 flag BKKT's valuation — Graham, Lynch, Dreman +8 more

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Tangible-Book Ratio1.0x

  ✓Graham<= 1.5x

  P/E x P/TBV

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)N/A (negative CFPS)

  ✗Dreman< 8x

  Price / Tangible Book Value per Share1.0x

  ✓Dreman< 1.2x✓SchlossP/TBV <= 1.00x (app cutoff)

  Valuation ReasonablenessOE Yield=-260.9%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF Yield

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/B=0.4x

  ✓MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share

  ✗Ackman<= 25

  Price vs. Trailing Low100% of trailing low ($3.38)

  ✓Templeton<= 120% of trailing low (certified split-adjusted live window)

  Price / Book Value per Share0.4x

  ✓Templeton< 1.5x✓SchlossP/B <= 0.80x (app cutoff)

  Net income / market capitalization-1.03%; #3409/6340 (top 53.8%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+2.0917; #650/6449 (top 10.1%)

  ✓AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Book Value per Share Change+7.6%

  ✓SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+13.2092; #274/5247 (top 5.2%)

  ✓OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-68.91%; #5633/6202 (top 90.8%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Growth13% pass✓ 3✗ 9▾

  7 of 8 flag BKKT's growth — Graham, Lynch, Dreman +4 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  EPS Growth Direction$-8.12 (2022) -> $-8.87 (2025)

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency0/5 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth373.3%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency1/3 years with positive EPS growth

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin -21.5% -> -6.3%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR141.4%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Verdicts15% pass✓ 2✗ 11▾

  Split decision: 11 FAIL · 3 NEUTRAL · 2 PASS

  Overall verdict

  ✗GrahamFAIL (2/7)✗BuffettFAIL (1/6)✗LynchFAIL (0/4)✗PiotroskiFAIL (F-Score 2)✗DremanFAIL (1/9)✗MungerFAIL (0/3)✗PabraiFAIL (1/3)✗AkreFAIL (0/5)✗MarksFAIL (1/4)✗AckmanFAIL (1/8)✓TempletonPASS (4/8)✓SleepPASS (3/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (1/6)•SchlossNEUTRAL (4/7)•OshaughnessyNEUTRAL (Not ranked)
• Debt & Leverage25% pass✓ 2✗ 3▾

  3 of 4 flag BKKT's debt & leverage — Templeton, Asness and Schloss

  LT Debt / Total Assets Change0.00% -> 0.00%

  ✓PiotroskiDecreased YoY

  Total Debt / Shareholders' Equity

  ✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Negative debt-to-equity (higher means less debt)

  ✗AsnessTop 30% of eligible cross-section

  Current Assets / Current Liabilities3.09x

  ✓SchlossCurrent ratio >= 1.50x (app cutoff)
• Efficiency33% pass✓ 1✗ 2▾

  2 of 3 flag BKKT's efficiency — Akre and Sleep

  Revenue / Total Assets Change YoY12.77x -> 14.35x

  ✓PiotroskiImproved YoY

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROE (5-year)0/4 years above 12% (latest -95.1%)

  ✗SleepROE > 12% in a majority of years