Coinbase’s Q2 miss – Why Bernstein still sees 85% upside for COIN

Coinbase Global Inc. (NASDAQ: COIN) slipped 3.76% on Monday and closed below $180. The move erased part of last week’s 30% gains after Bitcoin’s explosive rebound to $80K. 

However, the Coinbase COIN stock price pullback was part of a broader cool-off across the equity market. The risk-off move happened ahead of the Fed’s preferred inflation metric (PCE Price Index) scheduled for Wednesday, the 26th of August. 

Additionally, Nvidia’s Q2 earnings report is scheduled for Wednesday, with Friday’s Fed chair Warsh speech at Jackson Hole expected to close this week’s macro calendar. Collectively, it will be a volatile week for both crypto and equity markets. 

Bitcoin, in particular, may retreat or reclaim $82K to reinforce the start of the early innings of the next bull market cycle. Whatever the direction, it will influence crypto stocks such as COIN. 

Bernstein maintains $330 price target for COIN stock

That said, Bernstein analysts are still maintaining the $330 price target for COIN. At the current price level near $180, that’s 85% upside potential.

According to the analysts, led by Gautam Chhugani, Wall Street was underestimating the exchange and its potential. The exchange missed revenue targets in the Q2 earnings report.

However, Bernstein argued that the exchange’s stablecoins, derivatives, prediction markets, and subscription revenue will increasingly become large parts of the firm. According to them, Coinbase’s quarterly results were only telling one part of the story. 

Overall, 18 Wall Street analysts have issued a buy rating for the stock, with a consensus price target of $215. That implies a 20% short-term upside potential. 

Coinbase-backed advocacy group backs 32 candidates

Separately, Coinbase-backed advocacy group Stand With Crypto (SWC) has endorsed an additional 32 candidates ahead of the November midterm elections. The candidates are pro-crypto across the Republican and Democratic parties.

In March, the group backed six other legislators and plans to endorse more towards Election Day in November. Collectively, crypto-aligned PACs, including Fairshake, have committed $324M for elections. So far, Republicans have received more backing from the sector. 

For his part, Mason Lynaugh, executive director of Stand With Crypto, said, 

The midterms come at a key inflection point for crypto policy in Washington, D.C. As candidates from both parties are trying to reach voters outside of more traditional constituencies, they overlook crypto voters at their own peril.

As of July, a report indicated that the crypto industry led U.S election influence with $189M in donations.  

The broader industry’s move is aimed at ensuring the stalled CLARITY Act is passed and defended even under a new administration. How the bill’s progress will affect COIN stock remains to be seen. 

Final Summary

• COIN briefly dipped below $180 on Monday, partly giving up part of its recent +30% gain
• Bernstein still expects the stock to rally 85% to $330, citing revenue growth potential