After a year of poor performance, Coinbase has received a vote of confidence from Goldman Sachs. The bank upgraded its rating on the cryptocurrency exchange’s stock to buy from neutral. The company also raised its 12-month price target from $294 to $303 per share, representing a 28% upside. Coinbase stock has fallen 13% over the past 12 months, while the S&P 500 has risen 15% during that time. COIN 1Y Mountain COIN 1Y Chart Goldman analyst James Yaro said Coinbase’s poor performance has opened up an attractive entry point for investors. He said Coinbase should see a higher valuation over time as it moves from cyclical to structural growth. Yaro also praised Coinbase’s strong business fundamentals. “COIN’s scale and brand recognition continues to drive above-average revenue growth and market share expansion, and is complemented by recent product rollouts that provide a best-in-class (customer acquisition cost)…that increases competitiveness across COIN, particularly in new structural growth products,” he wrote. Analysts see further upside coming from further growth in Coinbase’s core services, in addition to new products and a growing crypto infrastructure business. “We are positive that COIN will expand its exposure to the crypto infrastructure business through its subscription and service offerings, which should dampen revenue volatility over time,” he said. “These have grown from less than 5% to ~40% of revenue from 2020-25E, and are expected to see further robust growth (13% annually from 2025E-27E) as the cryptocurrency ecosystem expands into use cases beyond trading. These businesses should support revenue declines as they are less sensitive,” Yaro added. Coinbase’s subscription and services business includes many areas such as custody, stablecoins, staking, and prime brokerage.
