On Tuesday, JMP Securities adjusted its share price target for Coinbase (NASDAQ:COIN) Global Inc. (NASDAQ:COIN), increasing it to $320 from the previous $300, while maintaining a Market Outperform rating.
The firm recognizes Coinbase's significant growth in trading volumes and points to the positive impact of spot Bitcoin ETFs on the business. Contrary to earlier market concerns about potential cannibalization, these ETFs have proven to be significantly additive.
Coinbase has been diversifying its revenue streams beyond its traditional exchange services. JMP Securities underlined the company's foray into other areas with high growth potential that are not yet fully appreciated by the market. One such area is the firm's Layer 2 blockchain, Base, which has recently begun to consistently generate over $1 million in revenue per day. This growth is still considered to be in the early stages of its potential.
The anticipated launch of Coinbase's smart wallet is expected to open up further opportunities in payments, remittance, and Web3 development. These developments could significantly enhance Coinbase's partnerships, such as with Circle and USDC, and contribute to new fee streams as Coinbase becomes a key infrastructure player in the industry. The relationship with Circle is particularly notable, as it is poised to support growth in Base and create additional revenue channels.
These initiatives are seen as multi-billion-dollar long-term revenue opportunities. JMP Securities suggests that investors should take note of these developments, as they are likely to contribute substantially to Coinbase's future growth and revenue.
InvestingPro Insights
As Coinbase Global Inc. (NASDAQ:COIN) continues to expand and diversify its revenue streams, real-time data from InvestingPro offers valuable insights into the company's financial health and market performance. With a current market capitalization of $62.26 billion and a notably high price-to-earnings (P/E) ratio of 642.29, investors are pricing in high expectations for future earnings growth. This is further emphasized by the adjusted P/E ratio for the last twelve months as of Q4 2023, which stands at a staggering 1326.74. Despite a decline in revenue growth of -7.08% over the same period, the company's gross profit margin remains robust at 85.62%, indicating strong underlying profitability in its core operations.
InvestingPro Tips highlight that analysts are optimistic about Coinbase's prospects, with net income expected to grow this year and three analysts having revised their earnings upwards for the upcoming period. Additionally, the company's stock price has experienced a large uptick over the last six months, with a 224.89% return, and maintained a strong return over the last three months at 69.08%. While Coinbase does not pay a dividend to shareholders, the potential for capital appreciation is underscored by these positive trends.
For investors looking to delve deeper into Coinbase's financial metrics and gain access to exclusive market analysis, more InvestingPro Tips are available. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. To explore further, visit https://www.investing.com/pro/COIN for a comprehensive list of additional tips and insights.
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