H.C. Wainwright initiated Coinbase (NASDAQ:COIN) with a Buy rating and $75 price target in a note to clients Wednesday, telling investors that the crypto winter is over.
Wainwright analysts stated that Coinbase have established a robust customer base, with 110M verified and 8.3M active users across 100 countries and "as the dominant crypto exchange in the US and one of the largest in the world," they believe it is "uniquely positioned to benefit from the large and rapidly growing global crypto economy given its trusted brand, easy to use products, and focus on compliance and regulation. In addition, the firm expect the company to gain market share in 2023."
"We view COIN as a scarce asset, as the only publicly listed crypto native company in the US with a market cap >$10B, which means competition for investor capital is extremely limited," the analysts wrote. "Given these dynamics, and with the stock down 85% from its peak in November 2021 (vs. Nasdaq's 24% decline), we believe current price levels offer an attractive entry point for investors, as shares now trade at just 3.6x 2023E revenue, a 35% discount to historical levels."
However, they acknowledged that there could be downward price pressure in the short term "as we learn more about the SEC's probe and potential actions against Coinbase."
"Crypto winter is over, and spring has sprung," declared the analysts.
"Crypto asset prices have rallied 45% YTD, supported by a 67% increase in BTC prices, indicating to us that crypto winter is over and that we have likely now entered BTC's next bull price cycle (not baked into current estimates), which has historically resulted in significant growth in total crypto market cap, incremental retail and institutional adoption, and higher crypto trading volumes, all key metrics that drive Coinbase's operating results."