KeyBanc Capital Markets has adjusted its price target for Robinhood Markets (NASDAQ: NASDAQ:HOOD), increasing it to $30 from $25, while maintaining an Overweight rating on the stock.
The adjustment comes as the firm takes a more neutral stance on Robinhood in the short term but remains optimistic about the company's long-term potential to gain market share.
The revised price target reflects a positive outlook based on recent operational data such as trading volume and net deposits. The analyst noted that despite a downtick in market share for both Robinhood and Coinbase (NASDAQ: NASDAQ:COIN) in the third quarter of 2024, Robinhood's shares have risen approximately 18% over the past month, outperforming the Nasdaq's 5% gain during the same period.
The firm's neutral short-term view on Robinhood ahead of the third-quarter earnings report, scheduled for October 31, 2024, after market close, is informed by a sequential increase in volatility and relatively marginal estimate revisions. KeyBanc's estimates for Robinhood are above consensus, suggesting a more favorable view of the company's performance.
In contrast, KeyBanc holds a negative bias on Coinbase, citing lower crypto trading volumes and market share shifts. The firm has lowered its estimates for Coinbase, which are below the Street's expectations, following a 29% increase in Coinbase shares over the past month.
In other recent news, Coinbase Global Inc. faced several price target revisions from analysts. US Tiger Securities reduced the price target to $380 from $400, anticipating a decrease in revenue by 6% for Q3 2024 due to a projected 14% drop in trading volume. Similarly, BofA Securities revised its price target for Coinbase to $196, while maintaining a neutral stance.
In a different development, Coinbase announced plans to remove select stablecoins in the European Economic Area by the end of the year, aligning with the upcoming Markets in Crypto-Assets regulation. This decision underscores Coinbase's commitment to regulatory compliance.
Coinbase is also challenging the Securities and Exchange Commission in a federal appeals court, seeking clarity on when a digital asset is considered a security. This legal action is part of the broader cryptocurrency sector's push for clear regulatory guidelines.
In terms of earnings, Coinbase's Q2 results showed a total revenue of $1.4 billion and an adjusted EBITDA of $596 million. However, the third quarter is expected to see a decrease in revenue, aligning with analysts' projections.
InvestingPro Insights
To complement KeyBanc's analysis on Robinhood and Coinbase, let's look at some real-time data from InvestingPro for Coinbase (NASDAQ:COIN). As of the latest available data, Coinbase's market capitalization stands at $54.72 billion, reflecting its significant presence in the cryptocurrency exchange market. The company's P/E ratio of 35.7 indicates that investors are willing to pay a premium for its earnings, which aligns with the high growth expectations in the crypto sector.
InvestingPro Tips highlight that Coinbase has shown a significant return over the last week, with a 12.15% price increase, and an impressive 29.47% return over the last month. This recent performance corresponds with KeyBanc's observation of Coinbase's 29% share price increase over the past month. Additionally, Coinbase has demonstrated strong revenue growth, with a 74.22% increase in the last twelve months and a remarkable 108.29% growth in the most recent quarter.
These metrics provide context to KeyBanc's cautious stance on Coinbase due to lower crypto trading volumes. While the firm has lowered its estimates for Coinbase, the company's recent financial performance suggests resilience in a volatile market. Investors seeking a more comprehensive analysis can find 12 additional InvestingPro Tips for Coinbase, offering deeper insights into the company's financial health and market position.
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