On Friday, Mizuho (NYSE:MFG) Securities adjusted its outlook on Coinbase Global Inc. (NASDAQ:COIN), raising the price target to $250 from the previous $215. The firm has kept its Underperform rating on the stock. The adjustment reflects the significant increase in Bitcoin's value, which recently soared to around $100,000, leading to heightened trading volumes across major cryptocurrency exchanges, including Coinbase and Robinhood (NASDAQ:HOOD).
According to InvestingPro data, Coinbase has demonstrated remarkable momentum with a 138% return over the past year and maintains a "GOOD" financial health score, though current analysis suggests the stock is trading above its Fair Value.
The analyst from Mizuho noted that despite the overall market growth benefiting all players, there seems to be a shift in retail crypto market share from Coinbase to Robinhood, a trend observed during October and November.
This shift is expected to persist, bolstered by Robinhood's competitive pricing strategy. Robinhood has been able to capture more than half of Coinbase's trading volume despite offering fewer than 10% of the tokens available on Coinbase.
The price target increase is also based on robust trading volumes observed in November and the current favorable market conditions. However, the firm's longer-term outlook remains cautious due to the ongoing shift in retail market share and competitive dynamics within the industry.
Coinbase's performance in the market is closely tied to the volatile cryptocurrency sector, where trading volumes can significantly impact revenue. While the recent surge in Bitcoin's price has been a boon for exchanges, the competitive landscape continues to evolve, with platforms like Robinhood gaining ground.
The analyst concluded with an expectation that the trend of market share shift towards Robinhood will likely continue over the coming years, influencing the long-term performance of Coinbase. Despite the raised price target, the Underperform rating suggests a cautious stance on the stock's future growth prospects in light of the competitive challenges it faces.
In other recent news, Coinbase Global Inc. has been the subject of multiple analyst adjustments. US Tiger Securities downgraded the stock from Buy to Hold, citing an altered risk-reward profile due to the recent surge in Bitcoin value. This development followed Bitcoin's remarkable ascent past the $100,000 mark.
Meanwhile, investment firm Oppenheimer raised its price target for Coinbase from $265 to $358, maintaining an Outperform rating. This adjustment followed recent political developments perceived as favorable for the cryptocurrency industry. Conversely, H.C. Wainwright reduced its price target for Coinbase to $255 from the previous $265, despite maintaining a Buy rating. This change came after Coinbase reported a revenue shortfall for the third quarter of 2024.
In addition to these adjustments, Coinbase experienced a 4.5% gain following Bitcoin's surge past $100,000. This surge in the value of digital currency is attributed to President-elect Donald Trump's appointment of Paul Atkins as the new Chair of the Securities and Exchange Commission (SEC), signaling a supportive stance towards cryptocurrencies.
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