Coinbase Has Been Choppy All Year: One Analyst Expects Nearly 80% Gains Ahead Anyway

Coinbase Global Inc. (COIN) has been experiencing a volatile year, with one analyst predicting an 80% increase in its stock price despite recent struggles. Bernstein analyst Gautam Chhugani has set a high target of $330 for COIN, representing a 77% upside potential. This comes after three consecutive earnings disappointments and an 18% decline in the stock's value year-to-date. In contrast, peers like Robinhood (HOOD) and Circle Internet Group (CRCL) have seen modest gains and outperformed COIN in the same period.

Chhugani's bullish outlook is based on three key factors: strong structural high-margin revenue growth outside of retail trading fees, an ongoing crypto liquidity supercycle driven by spot Bitcoin and Ethereum ETF flows, and regulatory clarity that is moving trading volume from offshore to compliant US platforms. The company's subscription services and stablecoin revenue have also been growing, contributing to a positive adjusted EBITDA for the 14th consecutive quarter.

Despite these positives, the broader market consensus sees a much lower target price of $194.97 for COIN, reflecting skepticism about the company's ability to recover from its recent earnings misses and declining trading volumes. The hedge between the consensus and Chhugani's target suggests a significant reward if the crypto market rebounds and Coinbase's diverse revenue streams continue to grow.

However, the bear case rests on the idea that crypto trading may enter a prolonged structural dry spell, with high operating losses and a forward P/E ratio above 833 indicating a premium being paid for a story that has yet to materialize.