By Senad Karaahmetovic
Oppenheimer analysts are increasingly more positive on Coinbase (NASDAQ:COIN) stock as the company makes progress towards returning positive adjusted EBITDA.
For them, this is “an important milestone” as many investors have a “strong impression” that the crypto exchange is not profitable while positive EBITDA also shows the company can manage its operating expenses, ultimately leading to long-term profitability.
The analysts are above the Street for adjusted EBITDA - +$34 million vs Street at +$9M.
“Recent strength in Bitcoin indicates that investors have been calling for alternative financial systems, driving upside potential for Coinbase. But the uncertain regulatory environment has negatively impacted blockchain development in the US, presenting downside risk for the company. Investors who have appetite to take on riskier assets, should, in our view, consider Coinbase as a candidate,” analysts said in a client note.
All in all, they are “tactically constructive on the stock going into the print. Coinbase is expected to report results in the first half of May.
“We see a lot of upside potential and downside risk for Perform-rated Coinbase,” analysts concluded.
On the other hand, BofA analysts believe Q1 revenue estimates “could be too high.”
“We remain cautious on COIN due to regulatory headwinds (Wells notice in March) and our view that consensus estimates are too high, as we expect soft retail crypto volumes. Maintain Underperform,” they wrote in a note.