Coinbase Faces Downside Risk Amid Retail Fatigue, Despite Recent Share Upswing: Analyst
Portfolio Pulse from Nabaparna Bhattacharya
Mizuho analyst Dan Dolev maintains an Underperform rating on Coinbase Global, Inc. (COIN) but raises the price target from $27 to $31. Despite COIN's share upswing (+170% YTD), Dolev warns of downside risk due to retail fatigue affecting revenue streams. Retail activity, crucial for COIN's revenue, shows a decline in monthly transacting user count and trading volume per user. However, near-term positives include higher spreads, stable market share against Robinhood Markets, Inc. (HOOD), and improved cost controls. The analyst has increased FY23 revenue and EBITDA estimates for COIN, while observing the impact of Bitcoin's price rise on user activity.
November 10, 2023 | 7:43 pm
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NEUTRAL IMPACT
Coinbase's retail market share is stabilizing against Robinhood, with no immediate negative impact indicated for HOOD from the analysis.
While the article mentions Robinhood in the context of Coinbase's market share, there is no specific analysis or rating change for HOOD, suggesting a neutral short-term impact.
CONFIDENCE 70
IMPORTANCE 40
RELEVANCE 50
NEGATIVE IMPACT
Mizuho analyst sees downside risk for Coinbase despite recent share gains, citing retail fatigue and declining user activity as concerns. Price target raised to $31, with FY23 revenue and EBITDA estimates increased.
The analyst's underperform rating and concerns about retail fatigue suggest a negative outlook for COIN's stock price in the short term, despite the raised price target and improved financial estimates.
CONFIDENCE 80
IMPORTANCE 90
RELEVANCE 100