Coinbase downgraded by Compass Point as Q2 results raise valuation concerns
Main Idea
Compass Point downgraded Coinbase due to valuation concerns and mixed Q2 results, citing weak retail interest and seasonal headwinds.
Key Points
1. Compass Point cut Coinbase's price target to $248 from $330, citing valuation risks and potential crypto market pullbacks.
2. Coinbase's Q2 results showed mixed performance, with transaction-based revenue missing analyst expectations despite beating overall estimates.
3. Analyst Ed Engel noted weakening earnings trends and a 'choppy' Q3 outlook, with seasonal headwinds in August and September.
4. Coinbase trades at 44 times forward earnings, nearly double the S&P 500's multiple, raising concerns about valuation sustainability.
5. Despite the broader crypto bull market, Compass Point remains cautious on Coinbase's near-term trajectory due to declining retail activity.
Description
Compass Point Research has downgraded Coinbase Global Inc. (NASDAQ: COIN) to sell from neutral, citing concerns over weakening earnings trends and a potentially overextended valuation. The move follows the crypto exchange’s second-quarter earnings release, which showed a mixed performance that may challenge the stock’s recent rally. Coinbase shares have surged over 26% year to date, closing at $314.69 on Friday. However, Compass Point now sees a downside of more than 21%, trimming its price targ...
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