An analyst from US Tiger Securities revised the price target for Coinbase (NASDAQ:COIN) Global Inc. (NASDAQ: COIN), reducing it to $380 from the prior target of $400. Despite the reduction, the analyst maintained a Buy rating on the stock.
The adjustment in the price target comes as the analyst anticipates a decrease in revenue for the third quarter of 2024 by 6%. This projection is based on an expected 14% drop in trading volume, despite a counteracting rise in trading fee rates. The result is an estimated 8% decrease in adjusted EBITDA for the same period.
The full-year 2024 revenue and adjusted EBITDA estimates have also been revised downwards by 6% and 11%, respectively. These changes are a reflection of the analyst's updated outlook for Coinbase's financial performance.
The analyst's decision to maintain a Buy rating indicates a continued positive view of the company's prospects. This is supported by the maintained probability rates for future performance, with a 70% chance assigned to a cycle top in 2025 and a 30% probability for a top in March 2024, consistent with the analyst's previous reports.
Coinbase's new price target of $380 reflects the revised expectations and the analyst's cautious outlook on the company's near-term financial results.
Coinbase, a leading cryptocurrency exchange, has announced plans to remove select stablecoins in the European Economic Area (EEA) by year's end, aligning with the upcoming Markets in Crypto-Assets (MiCA) regulation. BofA Securities has revised its price target for Coinbase, reducing it to $196 while maintaining a neutral stance on the stock.
Coinbase is currently challenging the Securities and Exchange Commission (SEC) in a federal appeals court, seeking to overturn the SEC's decision to deny its petition for new rulemaking regarding digital assets. Analyst notes include Citi reiterating its Buy rating on Coinbase shares with a steady price target of $345.00, while Barclays upgraded the cryptocurrency exchange from Underweight to Equal Weight, and Jefferies lowered its price target for Coinbase to $220 due to declining transaction revenue.
Coinbase's Q2 results showed a total revenue of $1.4 billion and an adjusted EBITDA of $596 million. However, the third quarter is expected to see a decrease in this revenue stream. These are among the recent developments that have been shaping the trajectory of Coinbase in the rapidly evolving cryptocurrency market.
InvestingPro Insights
While the analyst from US Tiger Securities has revised Coinbase's price target downwards, recent InvestingPro data offers a nuanced perspective on the company's performance. Coinbase's market capitalization stands at $51.78 billion, with a P/E ratio of 34, indicating investor confidence despite the analyst's cautious outlook.
InvestingPro Tips highlight that Coinbase has shown significant return over the last week, with a 17.59% price total return. This short-term performance aligns with the analyst's decision to maintain a Buy rating. Additionally, Coinbase's revenue growth is noteworthy, with a 74.22% increase in the last twelve months as of Q2 2024, and an impressive 108.29% quarterly growth in Q2 2024.
These metrics suggest that while the analyst has adjusted expectations for the near term, Coinbase continues to demonstrate strong financial performance. The company's ability to generate substantial revenue growth could potentially offset the projected decreases in trading volume mentioned in the analyst report.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Coinbase, providing a broader context for investment decisions in this volatile crypto-related stock.
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