Bottoming Out or Bouncing Back? Analyst Revises Coinbase Estimates Amid USDC Woes

  • Needham analyst John Todaro maintains Coinbase Global Inc COIN with a Buy and lowers the price target from $73 to $70.
  • Todaro lowered his Q1 FY23 volume estimate from $151 billion to $147 billion in a Monday note titled "COIN Q1 '23 Preview: Modestly Lowering Volume & Q2 Interest Income from USDC."
  • The analyst modestly raised his Q1 FY23 interest income estimate but lowered his interest income estimate for Q2 FY23 to reflect a 23% lower USD Coin Price (USDC) market cap. 
  • Due to Silicon Valley Bank's failure in late March, USDC's market cap declined 23% and is yet to recover. 
  • The analyst lowered his price target to reflect lower volume and interest income estimates for FY23. 
  • He estimates Q1 FY23 volume to remain nearly flat Q/Q. The analyst foresees Q1 to mark the first quarter since the crypto boom unwound that Coinbase's quarterly volume did not decline, offering optimism that retail volume could have bottomed. 
  • Additionally, alt-coin trading as a percent of total trading volume on Coinbase has increased, indicating increased retail risk-taking in crypto. 
  • Price Action: COIN shares traded lower by 6.99% at $50.03 on the last check Monday.
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