Shares of U.S. crypto exchange Coinbase fell nearly 20% in Monday's trading session amid the broader market rout and the Nasdaq's worst session since 2022, putting the stock's year-to-date drop to about 25%. However, analysts at Mizuho Securities are not concerned about the selloff.
"Since our last model update on February 20th, BTC has fallen from ~$98K to ~$79K and COIN shares are down ~30% (vs. SPX -9%)," analysts led by Dan Dolev wrote Tuesday in a note to clients. "While some multiple compression is warranted due to lower multiples across tech, we believe the move in COIN shares is overdone."
As of Feb. 20, Mizuho modeled $4.5 billion of daily spot trading on the Coinbase platform for the first quarter of 2025. Despite bitcoin's drop over the past few weeks, the firm said average daily spot volumes have ticked up to an average of $5 billion since that day. As a result, Mizuho has raised its quarterly estimates from $2.23 billion to $2.31 billion in revenue for the quarter.
Mizuho says Coinbase's stock should trade closer to its revised $217 price target. Its current price is around $191, according to The Block's COIN price data.
"While we see some upside from here as high volatility in the market should help sustain strong volume trends, we remain Neutral given the longer-term risk of pricing pressure from increased competition across the crypto trading space," the analysts wrote in the note.
Dolev said Coinbase's retail take rates remain on the rich side, and the firm is worried "about price compression over time as a more friendly regulatory environment under the Trump administration and the presence of bitcoin ETFs may increase competition."
Last month, Coinbase reported fourth-quarter revenue of $2.3 billion, up from $953.7 million in the same period the prior year. Fourth-quarter transaction revenue rose 172% to $1.6 billion from the prior year's $529 million. Meanwhile, Robinhood's transaction-based revenues rose to $672 million, with cryptocurrency trading surging 700% to $358 million.
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