As HOOD gains more share in the crypto space, analysts at Mizuho see it helping to pressure Coinbase (NASDAQ:COIN) shares, with the firm maintaining an Underperform rating and $145 price target on the stock in a note Friday.
The firm notes that after analyzing 1Q volume data points, Coinbase lost retail market share to Robinhood (NASDAQ:HOOD) in the first quarter.
"Our analysis shows that COIN's share of combined COIN consumer + HOOD retail crypto volumes declined by ~800bps Q/Q in 1Q to a record low of 61%," explains Mizuho.
"We estimate that share held at 61% in April, based on disclosures the companies made on their 1Q earnings calls," they add. "Why is this important? COIN is heavily reliant on retail transaction revenue, which comprises nearly 60% of its overall mix and nearly 90% of total transaction revenue."
As a result, Mizuho lowered its 2024 revenue estimates for Coinbase based on lighter-than-expected daily trading volumes in April. Its 2024 EBITDA estimate moved slightly higher based on better cost control.