Coinbase Global COIN> created a user-friendly platform for sending and receiving Bitcoin BTC-USD> in 2012. Coinbase had become well-known by 2021, and COIN shares had recently been made available to the general public.
This event was surrounded by a lot of buzz. However, the stock price has dropped, and some investors are understandably disappointed.
The tale of COIN stock, on the other hand, is still being written, and we’re still in the early stages. Is it therefore feasible that the stock is merely a late bloomer in the making?
As we’ll see, there are several reasons why cryptocurrency investors should not abandon Coinbase just yet. Furthermore, a well-known Wall Street analyst just set a price objective that may surprise you – or encourage you to buy.
COIN Stock: A Closer Look
Let’s start with a recap of what’s happened thus far. Coinbase went public via a direct listing or direct public offering (DPO) on April 14, 2021, rather than an initial public offering (IPO).
COIN stock was given a starting price of $250 per share, but once the opening bell sounded on its first day of public trading, it nearly instantly surged past $300.
There’s no denying that this was a good start. The euphoria, however, would not last long.
Surprisingly, after the direct listing, COIN stock fell for three months. The stock price hit a low of $208 in June.
However, it’s possible that a recovery is underway. By July 9, Coinbase’s stock had risen above $250, indicating that the company was making cautious but steady success.
I believe that $300 will be a psychologically significant barrier level in the future. However, as we’ll see later, there’s a financial expert who believes the price should be far higher.
There are four reasons for this, and only one price target.
It would be an understatement to call MoffettNathanson analyst Lisa Ellis “bullish” on Coinbase.
Ellis apparently revealed a jaw-dropping $600 price estimate for COIN stock not long ago.
Before you discount Ellis’ bold prediction, think about the four contributing variables she mentioned.
For starters, Ellis claims that blockchain technology outperforms traditional finance. On a decentralized ledger, for example, transactions become part of a “immutable record” that is less susceptible to manipulation or fraud.
Second, according to Ellis, blockchain technology faces obstacles, but it is evolving and overcoming them.
The third factor is that cryptocurrencies are gaining popularity for a wider range of applications. Cryptos, for example, might be considered a “store of value.” Furthermore, according to Ellis, some digital tokens may be beneficial for transactions and “smart contracts.”
Fourth, according to Ellis, the cryptocurrency ecosystem is becoming more mainstream. This is something I tend to agree with. Large corporations and even central banks are now beginning to acknowledge and even welcome the crypto revolution.
A Significant Dislocation
While Ellis’ $600 price objective is backed up by a four-pronged thesis, not every Wall Street expert is on board.
Owen Lau, an analyst at Oppenheimer, is an example of a less ambitious observer who is nonetheless solidly in the bull camp when it comes to Coinbase.
Lau increased his price target on COIN stock from $434 to $444 not long ago.
While this isn’t as exciting as Ellis’ target, it still implies significant upside from the present share price.
For Lau, it appears to be less about Ellis’ four catalysts and more on the upcoming quarterly data release.
“We predict [Coinbase] will post another record quarter in trading volume, revenue, verified users, and MTU [monthly transacting users] based on our tracker and analysis,” Lau said.
In light of this, Lau believes there is a “severe dislocation” between Coinbase’s fundamentals and its valuation.
As a result, the analyst feels the present price of COIN stock is a “excellent entry point for long-term investors.”
Final Thoughts
Choose your price objective for Coinbase shares: $600, $444, or anything else.
If it’s much higher than the present price, you’ll probably agree that there’s a “sharp dislocation” that investors may and should profit from.
The stock market may be unexpected, volatile, and downright ridiculous at times. InvestorPlace.com aims to cut through the clutter and provide you with information that matters – and how it affects your portfolio. We cover everything from equities to cryptocurrencies to pre-IPO investments with care. InvestorPlace.com has your back, whether you live and breathe stock news or want your stocks to pay you.
David Moadel did not hold any positions in the securities mentioned in this article (directly or indirectly) at the time of publishing. The writer’s views are his or her own, and they are subject to the InvestorPlace.com Publishing Guidelines.
In after-hours trading on Monday, COIN shares declined $0.15 (-0.06%). COIN has dropped -24.56 percent year to far, compared to a 17.67 percent advance in the benchmark S&P 500 index.
David Moadel is the author of this book.
On behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com, David Moadel has supplied intriguing information – and occasionally crossed the line. He also works at Portfolio Wealth Global as the principal analyst and market researcher, and he presents the prominent financial YouTube program Looking at the Markets. More… More Information on the Stocks Mentioned in this Article/n
