The inherent riskiness of relying on court decisions for assessing crypto’s outlook became apparent on July 31, when another federal judge issued a diverging ruling in a separate case. The stock was little changed in early trading in New York on Thursday. Estimates for what Coinbase shares are worth range from $36 to $145 since July 13, Bloomberg-compiled data show. Since then, analysts including Citigroup Peter Christiansen have sharply raised their price targets for Coinbase, while others like Palmer and Benjamin Budish of Barclays kept theirs unchanged. Investors, at least initially, saw the decision as a big win for crypto platforms like Coinbase, which was sued in June by the SEC for allegedly running an illegal exchange, broker and clearing agency. The July 13 ruling by a US federal judge that Ripple’s XRP token is a security when sold to institutional investors but not the general public triggered a 24% rally in Coinbase stock, the biggest one-day gain since April 2021. Quarterly transaction revenue was the lowest since the company went public in 2021, analysts predict. Since Bloomberg News first reported in March about plans to potentially set up a new crypto-trading platform overseas, consensus estimates for 2024 revenue have kept drifting lower as the SEC sued Coinbase.Ĭoinbase is expected to report a 23% drop in second-quarter sales from a year earlier, estimates compiled by Bloomberg show. He rates the stock a “hold” and calls it “uninvestable in the near term.” His price target is $39, compared with Wednesday’s close of $90.43.Īnalysts don’t expect Armstrong’s overseas push to meaningfully alleviate pressure on revenue at least through next year, estimates compiled by Bloomberg indicate. “We are surprised that the market was as exuberant as it was, simply because the company continues to face very significant risks on the regulatory front,” said Palmer, a senior research analyst at Berenberg. In response to the bleak US environment, Armstrong is embarking on an overseas expansion. Stock bears like Berenberg’s Mark Palmer say the stream of good news that lifted Coinbase doesn’t have any bearing on its growth outlook, which has been hurt by the SEC’s clampdown on the company and the wider sector. There’s a 75% gap between the highest and lowest price targets issued since the Ripple ruling.Īmid the divergence, much rides on Chief Executive Officer Brian Armstrong’s ability to reassure investors about Coinbase’s growth prospects when it reports second-quarter earnings on Thursday after the market close. That’s left some analysts ratcheting up price targets for the crypto exchange, while others say the stock has decoupled from reality. The stock has jumped almost 80% since mid-June, buoyed by BlackRock Inc.’s application to launch a Bitcoin exchange-traded fund and Ripple Labs Inc.’s partial court win against the Securities and Exchange Commission a month later.
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