Compass Point Lowers Coinbase Price Target Amid New Product Launches
- Compass Point analysts reiterated a “Sell” rating for Coinbase shares, reducing the price target from $266 to $230.
- Tokenized equities are seen as a $230 million revenue opportunity for Coinbase, surpassing the $210 million expected from prediction markets.
- Coinbase shares fell over 5% to $252 on Monday, while Robinhood’s stock rose by an impressive year-to-date climb of 215%.
- Coinbase plans to offer tokenized equities to U.S. customers, entering a competitive market among “eBrokers.”
- The exchange could earn significant revenue from prediction markets by charging per contract traded and enhancing its stablecoin balance with USDC.
Compass Point analysts see tokenized stocks as a larger revenue opportunity than prediction markets for Coinbase, though it may take years for these revenues to materialize fully. The analysts remain skeptical about new verticals offsetting earnings sensitive to volatile crypto prices.
Despite potential in new products like tokenized equities and prediction markets, Compass Point maintains a cautious outlook on Coinbase due to current market volatility impacts on earnings. (Source)
