Needham analyst John Todaro reiterated a Buy rating on Coinbase Global, Inc COIN with a price target of $120.
The analyst believes COIN exited the crypto ‘winter’ better positioned than in the prior upcycle, during which it had its initial public offering.
Crypto has rallied the last few months, and Bitcoin BTC/USD has slowly made new local highs since bottoming at the end of FY22, giving him cautious optimism of being still early in the rally.
The most significant bear points failed to materialize. COIN’s fees and spreads did not compress but expanded. FTX did not crush COIN. Todaro notes that COIN is well positioned if crypto has entered a bullish period.
Coinbase‘s competitors FTX and Bittrex are gone, and Binance is in retreat. Todaro highlights the higher take rate, Q3 FY23 rate of 249bps vs 110bps in Q3 FY21.
Even with rate cuts, the analyst sees higher interest income than in FY21. 3 Bitcoin ETF applications with COIN listed as custodian.
Analyst sees a $300 million revenue opportunity for Coinbase.
Todaro projects Q4 revenue of $870 million and EPS of $0.22.
Price Action: COIN shares traded lower by 3.01% at $102.91 premarket on the last check Tuesday.
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