By Sam Boughedda
In a broader note on cryptocurrency markets, A BofA analyst said Friday that they are lowering their estimates on Coinbase (NASDAQ:COIN) but raising their price target to $92 from $80 per share and maintaining a Buy rating on the stock.
The analyst said they lowered their second-quarter MTU forecast for Coinbase to 8.1M from 8.8M, representing a 7.5% YoY decline, in-line with Sensor Tower data ('22 guidance is 5M-15M).
BofA's crypto data tracker series leverages app data from Sensor Tower and crypto exchange volume data provided by CoinGecko. From Sensor Tower, they track global and US app downloads and monthly active users (MAUs) across crypto providers, including Coinbase, Binance, FTX, Kraken, and others.
"COIN's guidance calls for '22 Average Transaction Revenue Per User (ATRPU) in the range of pre-2021 levels (2017-2020 average ATRPU was ~$45). However, COIN's CFO noted on the 1Q22 call that ATRPU at that time was heading into the high $ 20's, so we would not be surprised if COIN lowers its ATRPU guidance on the 2Q call. We lower our 2Q ATRPU estimate to $28 ($32.5 prior) and FY22E to $32 ($34.6 prior). Our 2Q/FY22E net revenue forecast is now $827M/$3,753M ($1,007M/$4,088M prior) vs consensus at $850M/$3,881M. Consensus calls for 2Q MTUs/ATRPU of 8.5M / $33.4," wrote the analyst.
"Following recent headcount reductions, we expect COIN to reiterate its target for Adj. EBITDA losses to not exceed $500M this year," he added.
BofA believes Coinbase is well-positioned to take market share during the "crypto winter" while adding that concerns about liquidity and safety of customer assets are "overblown."