Coinbase COIN surged to 52-week highs on June 25, bolstered by a bullish note from Bernstein analysts who described the company as the "Amazon of crypto services," as quoted on Yahoo Finance. The stock rose over 3%, edging closer to its all-time high of $357.39, last seen on Nov. 9, 2021.
Bernstein Bullish on Coinbase
In a report released Wednesday morning, Bernstein’s lead crypto analyst Gautam Chhugani and his team upgraded their price target on Coinbase to $510 from $310, while maintaining an "Outperform" rating. The analysts emphasized that Coinbase is "the most misunderstood company" in their crypto coverage universe, as quoted on Yahoo Finance.
They highlighted Coinbase's position as the sole cryptocurrency company in the S&P 500, its dominance in U.S. crypto trading, and its leadership in the stablecoin exchange business. Additionally, Coinbase acts as custodian for the underlying assets of the majority of U.S. spot bitcoin ETFs.
According to Bernstein, Coinbase has significantly diversified its offerings beyond simple trading. Its expanding portfolio includes institutional custody, Base blockchain infrastructure, and a Prime lending desk.
Price Target & Broker Rating
Based on short-term price targets offered by 26 analysts, the average price target for Coinbase Global, Inc. comes to $275.40. The forecasts range from a low of $185.00 to a high of $421.00. The average price target represents a decline of 20.13% from the closing price of $344.82 recorded on June 24.
Coinbase Global, Inc. currently has an average brokerage recommendation (ABR) of 2.14 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 29 brokerage firms. The current ABR compares to an ABR of 2.27 a month ago based on 26 recommendations.
Of the 29 recommendations deriving the current ABR, 13 are Strong Buy and one is Buy. Strong Buy and Buy, respectively, account for 44.83% and 3.45% of all recommendations. A month ago, Strong Buy made up 38.46%, while Buy represented 3.85%.
Upbeat Magnitude Revisions
The Zacks Consensus earnings estimate for the current quarter of Coinbase stands at $0.91, up from $0.83 recorded a month ago. The estimate for the next quarter has increased by $0.08 to $1.10 per share. For the full year, the estimate is now $2.96 per share, up from $2.41 recorded 30 days ago.
Regulatory Tailwinds Fuel the Rally
Coinbase’s recent rally—up around 40% this year—has been fueled in part by the Senate’s passage of the GENIUS Act. The legislation would create a federal framework for stablecoins, helping to legitimize and support growth in digital assets like USDC.
Other crypto-related companies have also posted strong gains this year, reflecting increasing institutional adoption of bitcoin and growing optimism around stablecoin regulation.
Any Wall of Worry?
Coinbase shares lack value. The stock has a downbeat Value Score of F. Shares trade at a trailing 12-month price-to-earnings (PE) ratio of 49.12X versus 15.16X recorded by the underlying Financial - Miscellaneous Services industry.
Time to Buy COIN-Heavy ETFs?
Against this backdrop, investors who want to shy away from risks but still tap into the winning momentum of COIN shares may consider COIN-heavy ETFs such as the First Trust SkyBridge Crypto Industry & Digital Economy ETF CRPT, Fidelity Crypto Industry and Digital Payments ETF FDIG, iShares Blockchain and Tech ETF IBLC, Global X Blockchain ETF BKCH, and Bitwise Crypto Industry Innovators ETF BITQ. Each of these ETFs has at least 10% exposure to COIN.
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Global X Blockchain ETF (BKCH): ETF Research Reports Coinbase Global, Inc. (COIN): Free Stock Analysis Report Bitwise Crypto Industry Innovators ETF (BITQ): ETF Research Reports First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT): ETF Research Reports Fidelity Crypto Industry and Digital Payments ETF (FDIG): ETF Research Reports iShares Blockchain and Tech ETF (IBLC): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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