Coinbase stock: H.C. Wainwright updates COIN price target, reiterates Buy rating

Coinbase shares traded above $60 on Wednesday, up more than 24% in the past five days and over 80% higher in year-to-date returns. 

Incidentally, the price of COIN has remained positively poised after the company’s revenue beat as announced in its first quarter 2023 results. H.C Wainwright analyst Mike Colonnese has now raised the price target for the stock, reiterating a Buy rating.

H.C Wainwright gives COIN $77 price target

According to Colonnese, there was a lot to like about Coinbase from its recently reported first quarter financial results. The analyst’s bullish outlook for the stock is down to the company’s revenue beating consensus estimates on the top and bottom line. In doing so, Coinbase returned to profitability – the first time the leading US-based crypto company did so since the first quarter of 2022.

Positives for Coinbase going forward will be an increase in retail take rate as retail fees continue to account for a large share of Coinbase revenue. Also notable will be the institutional numbers for Coinbase Prime after record volumes in the first three months of 2023. This aspect of the business could be helped by the recent launch of Coinbase International Exchange in Bermuda, the analyst noted.

Meanwhile, the exchange’s recent view of crypto regulation in the US and commitment to remain in the country is a key factor. Colonnese wrote:

“While we acknowledge potential near-term risks associated with the Wells Notice received from the SEC in March, we believe the risk reward profile skews to the upside, as we maintain our bullish stance on shares and reiterate our Buy rating.”

Coinbase’s Q1 revenue of $773 million was +23% q/q, above the consensus forecasts of $665 million by 18%. H.C Wainwright has given the company a 2023 total revenue estimate of $3.04 billion, up from $2.09 billion when they initiated coverage ahead of the better-than-expected Q1 results.

In highlighting the new price target, Colonnese said the expectation is that crypto will continue to see bullish price action in 2023. Coinbase’s market share gains will also likely drive estimate revisions higher in the next few quarters.

It should be noted that Bitcoin is forecast to rally amid a new bull cycle, a scenario that could catalyse gains for COIN and other crypto stocks.

Risks that could derail Coinbase targets will include crypto price corrections, regulatory uncertainty and intense competition. Continued concentration of retail trading revenue is also another potential negative.

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