The week began with another meltdown in the crypto sphere after crypto lender Celsius Network said it is pausing withdrawals from the platform. The latest pullback follows another recent debacle, after the stablecoin TerraUSD de-pegged from the U.S. dollar and sent the whole ecosystem crashing.
Stocks with heavy exposure to the space were also bleeding in sympathy and so were shares of Coinbase (COIN), further adding to what has been a horror show in 2022 – shares are down by 80% on a year-to-date basis.
On top of the extremely difficult macro conditions, the crypto bear market has depressed trading volumes and as a result of the downturn, the company has put the brakes on hiring. In any case, Coinbase seems to have enough disgruntled workers to contend with right now after it recently emerged that an anonymous employee petition requested the removal of some execs, saying they had been "executing plans and ideas that have led to questionable results and negative value." CEO Brian Armstrong didn't appear too sympathetic, stating the petition was "really dumb on multiple levels," and saying employees could basically go work elsewhere if they were unhappy with the leadership's performance.
The problems might be multiple, but they haven't dampened Cowen analyst Stephen Glagola's enthusiasm, who thinks the company is doing relatively well when compared to others in the space.
"COIN's Q2:22 to-date total trading volumes have held up well vs. competitors, and we believe the company remains well capitalized to navigate through a crypto winter ending Q1:22 with liquidity of $6.3B," Glagola said.
Glagola rates COIN as Outperform (i.e. Buy) while his $85 price target suggests shares could deliver returns of 67% in the year ahead. (To watch Glagola's track record, click here)
J.P. Morgan's Ken Worthington is another analyst who remains on side, noting this will not be the first time the company has been through a trying period.
"The recent crypto market downturn has been particularly difficult for Coinbase's trading volumes, MTUs, etc," Worthington said. "Keep in mind that Coinbase has weathered past downturns (founded in 2012) and has emerged to become a key player in the crypto economy. With a strong balance sheet, Coinbase retains ample strategic flexibility and mgmt. seems committed to continue investing in the business despite any cyclical downturn."
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Worthington's Overweight (i.e. Buy) rating is backed by a confident $171 price target, which makes room for 12-month gains of a huge 238%. (To watch Worthington's track record, click here)
Most on the Street also remain in Coinbase's corner; the stock has a Moderate Buy consensus rating built on a solid 15 Buys vs. 3 Holds and 2 Sells. There are plenty of gains projected here; The $152.16 average target implies share appreciation of ~200% over the next 12 months. (See Coinbase stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.