I would geld him honestly. He's cute and seems to have decent confo from the little I can see in the pic but his bloodlines aren't "breeding quality". There's some good horses in there but nothing outstanding and there's a LOT of Sugar Bars there up close.
With this economy there's really not much happening as far as breeding, people are having a very hard time breeding and selling foals. I see outstanding stallions who are shown with amazing bloodlines being offered for $300 stud fees.
With this guy not even being broke you have no idea what he's going to have talent for and in order to breed him to outside mares he's going to need to show potential or true skill in one area or another.
But if you have worked with stallions and have a proper set up for him then I guess there's no harm in trying.
I just don't see him being stud quality, he'd make a nice gelding, plus you wouldn't have to deal with stallion issues lol