Coinbase Downgraded Due To Troubled Crypto Market: “Run-Rate Warrants Caution For 2023” – Coinbase Global (NASDAQ:COIN)

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Coinbase Global Inc COIN shares traded down 3.7% on Wednesday after a Wall Street analyst threw in the towel on the battered stock.

The Analyst: Bank of America analyst Jason Kupferberg downgraded Coinbase from Neutral to Underperform and reduced its price target from $50 to $35.

The Thesis: In the downgrade note, Kupferberg said Coinbase’s fourth-quarter crypto trading volume, coupled with a bleak outlook for the crypto market as a whole in 2023, suggests Coinbase is unlikely to meet expectations. consensus revenue this year.

Related Link: Coinbase Investors Applaud Layoffs: Is the Stock Turning or Does Bitcoin Have a Date with $10,000?

“Given the volatile crypto environment, we believe it will be difficult for stocks to tolerate a significant downward revision to consensus estimates,” Kupferberg said.

Coinbase’s “current volume rate warrants caution for 23,” he added. Volumes will likely be well below consensus estimates. It predicts $589 billion in crypto volume in 2023, well below the current consensus forecast of $815 billion.

Kupferberg praised Coinbase for its layoffs and other cost-cutting measures, which confirms the company is prioritizing balance sheet liquidity in a challenging environment. However, Bank of America’s 2023 transaction revenue estimate of $1.264 billion and total revenue estimate of $2.253 billion are below current Wall Street consensus estimates by 32% and 24%, respectively. .

After 1,100 job cuts in 2022, Coinbase’s next round of 950 job cuts will reduce its total workforce by approximately 35% since June 2022.

Related Link: Coinbase Lays Off 950 Employees – CEO Armstrong Blames ‘Current Economic Climate and Crypto Market’

Benzinga’s View: The 2021 crypto boom was a 2022 bust. continue to rise in Q1, it’s hard to see much upside for crypto. or Coinbase in the medium term.

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