Coinbase’s positives unnoticed, long-term position ‘stronger than ever’

By Vlad Schepkov

Oppenheimer issued bullish comments on Coinbase (NASDAQ:), noting that despite ‘challenging’ near-term outlook, the company’s long-term position is currently ‘stronger than ever,’ and reiterated an ‘Outperform’ rating on the shares with a $72 price target.

In its latest note on America’s largest crypto exchange, Oppenheimer analysts argue COIN’s “many positives are unnoticed, and potentially not priced in.” Among those, they highlight:

1. Diversification: Subscription and service revenue are continuing to grow as a percentage of total revenue, “potentially reaching 50%.”

2. Market share gains: Following “the FTX fallout, Coinbase has gained market share from 1.5% in October to 2.1% in December.”

3. Balance sheet strength: “With ~$5.0B cash, $368M USDC and $233M custodial account overfunding, COIN has strong balance sheet with net USD resources of $2.7B, or ~$11/sh.”

4. Depressed, attractive valuation: “COIN trading at only 2.3x 2023E revenue versus 8.0x for comparable high-growth fintech stock”, as the stock “has priced in a lot of these unfavorable news.”

As such, the analysts see a buying opportunity in shares noting that despite the “painful near term, Coinbase can be one of the few long-term survivors in this space, which we think makes it attractive.”

Oppenheimer rates the shares ‘Outperform’ and has a $72 price target, implying nearly 100% upside from current levels.

COIN closed at $38.27 yesterday, down around 90% from the heights of the 2020-2021 ‘crypto-run’.