Market News

Can Coinbase Crawl out of the Crypto Carnage?

Shares of Coinbase Global (NASDAQ:COIN) have now tanked ~83.6% so far this year, short interest in the stock is inching closer to 18% and its market capitalization is just shy of $10 billion.

Adding to this, while the crypto exchange had posted an EPS of $17.10 on revenues of $7.84 billion in 2021, analysts now see the company incurring a net loss per share of $5.5 on revenues of roughly $3.2 billion for 2022.

This change of fortunes has come about on tanking cryptocurrency prices that always seem to find a new bottom, and ongoing upheavals in the crypto industry. The FTX-Alameda debacle (in a span of just one week) and now Genesis are both cases in point.

At this juncture, the Street remains cautiously optimistic on the stock with a Moderate Buy consensus rating based on nine Buys, seven Holds, and three Sells.

Bank of America Securities’ Jason Kupferberg, who has a Hold rating on the stock, thinks risks are increasing for the company amid falling investor faith in digital assets and a rising regulatory spotlight.

The analyst thinks COIN could gain market share after the FTX implosion but lowered trading activity could be a challenge. Further, wider contagion risks in the industry continue to linger.

While the Street still sees a potential 86.8% upside in COIN based on an average price target of $77, Bitcoin (BTC-USD) has cratered nearly 67% year-to-date and 17.7% in the past month alone.

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