Goldman Sachs Analyst Lowers Coinbase Price Target, Maintains Hold Rating

Goldman Sachs's Will Nance lowered their price target on Coinbase (NASDAQ: COIN) by 13.6% from $295 to $255 on May 6, 2024. The analyst maintained their Hold rating on the stock.

In their analysis, Nance acknowledged Coinbase's strong Q1 2024 earnings report, which exceeded market expectations. The company reported EPS of $1.65, beating both the Zacks Consensus Estimate of $1.04 and the previous year's Q1 earnings of $0.15. Additionally, Coinbase reported revenue of $1.64 billion, surpassing the Zacks Consensus Estimate by 29.55% and Q1 2023's revenue of $772.53 million. The company's adjusted EBITDA also showed significant growth, reaching $1.014 billion compared to $287 million in Q1 2023.

Despite these positive results, Nance expressed caution in their price target cut. They highlighted the lack of a longer-term trajectory to underwrite in the broader market, leading them to believe that the stock's risk/reward reflects volatility in crypto asset prices.

Coinbase's management provided guidance for Q2 2024, stating that they expect Q2 subscription and services revenue to be within a range of $525 million to $600 million, assuming crypto asset prices remain stable. The company also anticipates transaction expenses to be in the mid-teens as a percentage of net revenue, with technology & development and general & administrative expenses ranging from $660 million to $710 million.

In their Letter to Shareholders, Coinbase's management expressed satisfaction with their Q1 performance, attributing it to focused execution on product expansion, operational discipline, and favorable market conditions. They also highlighted achievements such as increased market share in US spot and derivatives, record highs on Coinbase Prime, and the growth of USDC market capitalization.

Following Nance's update, Barclays's Benjamin Budish also issued an analysis on May 6, 2024. Budish raised their price target on COIN by 14% from $179 to $204 but maintained their Strong Sell rating on the stock.

According to the latest data, 54.5% of top-rated analysts rate COIN as a Strong Buy or Buy, while 36.4% consider it a Hold. Only 9.1% recommend selling the stock.

The consensus forecast among analysts predicts that COIN will deliver earnings per share (EPS) of $3.36 for the upcoming year. If these predictions hold true, COIN's yearly EPS will experience a 39.7% decrease on a year-over-year basis.

Since Coinbase's Q1 2024 earnings report on May 2, 2024, the stock price has declined by 6.3%. However, on a year-over-year basis, the stock has surged by an impressive 268.9%, outpacing the S&P 500's growth of 25.4%.

It's worth noting that Goldman Sachs analyst Will Nance is ranked in the bottom 1% out of 4,577 Wall Street analysts by WallStreetZen. Their average return stands at -14.7%, with a 39% win rate. Nance specializes in the Technology and Financial Services sectors.

Coinbase Global, Inc. is a leading provider of financial infrastructure and technology for the crypto economy. The company offers primary financial accounts for retailers in the crypto market, a marketplace for institutions to transact in crypto assets, and technology and services to enable partners to build crypto-based applications and accept crypto assets as payment.

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