Stock analyst Mike Colonnese from the firm H.C. Wainwright more than doubled his price target on Coinbase (NASDAQ: COIN) early Tuesday morning. Colonnese reiterated a "buy" rating on the crypto-trading veteran, boosting his price target from $115 to $250 per share. Wainwright now has the highest price target among 22 firms covering the stock and tracked by MarketBeat, suggesting a 44% price gain.
Wainwright's predictions are grounded in Coinbase's strong fourth-quarter performance, which surpassed analyst expectations, resulting in a net profit and revenue exceeding consensus estimates. The company also provided optimistic guidance for the next quarter, highlighting its resilience in a challenging economic environment with low cryptocurrency prices. Colonnese believes that Coinbase will further solidify its dominant market share in American crypto-trading services during the anticipated bull run triggered by the upcoming Bitcoin halving.
Although Coinbase's stock currently trades at high multiples, such as 13 times sales and 68 times free cash flow, the expected surge in the crypto market following the Bitcoin halving is seen as a catalyst. With Coinbase charging substantial trading fees, the company is poised to benefit significantly from increased market activity. It's worth noting that Coinbase entered the public market after the last halving-based cryptocurrency surge, so there is no historical data to guide expectations for its reactions to such events.
Despite navigating uncharted territory for investors, Colonnese's analysis is seen as generally accurate. The anticipation is that Coinbase's stock will experience a surge over the next few years, potentially reaching $250. While this target may be ambitious, even a more conservative increase would be considered positive news for investors.