Coinbase Global, Inc. (NASDAQ: COIN) shares have weakened more than 10% since the beginning of the 2022 year, and the current share price stands at $228.
Bank of America has a positive view of the shares of this company, and it reported that expects upside potential for Coinbase’s business.
Bank of America sees upside potential
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Coinbase is an American company that operates a cryptocurrency exchange platform and offers products for both retail and institutional cryptocurrency investors, as well as other related cryptocurrency products.
Coinbase has over forty million verified users and, as of March 2021, was the largest cryptocurrency exchange in the United States by trading volume.
The company’s business has proven improvements throughout the third fiscal quarter, and Coinbase reported strong earnings results in November.
Total revenue has increased by 315% Y/Y to $1.31 billion, while the GAAP earnings per share were $1.62 (beats by $0.19).
Bank of America reported last week that it expects a positive trend in the upcoming years, and according to Bank of America, Coinbase shares represent a buying opportunity. Bank of America analyst Jason Kupferberg added:
Subscription & services revenue made up 12% of total net revenue in Q3 2021, up from 4% in ’20, and BofA forecasts will account for 16% of total revenue in 2023. We see a combination of offering likely driving the trend: blockchain rewards, its earn campaign (where users earn crypto for learning more about crypto), its yet-to-be-launched NFT platform, and decentralized finance products.
Coinbase is expanding its business, and the company announced plans to acquire regulated crypto derivatives exchange FairX.
Coinbase plans to bring regulated crypto derivatives to the market, and it will use FairX’s infrastructure to offer crypto derivatives to all Coinbase customers in the U.S.
There is high demand for products within the derivatives space, and the deal is expected to close by the end of the first quarter.
Fundamentally looking, Coinbase trades at less than sixteen times TTM EBITDA, and with a market capitalization of $49 billion, shares of this company are fairly valued.
$200 represents current support
Coinbase shares have been losing their value since November 09, 2021, and investors should consider that if the U.S. stock market enters a more significant correction phase, shares of Coinbase could be at much lower levels.
According to technical analysis, bears control the price action for now, and falling below $200 supports the negative trend.
On the other side, if the price jumps above $250 resistance, it would be a “buy†signal, and the next target could be at $270.
Summary
Coinbase reported strong earnings results in November, and according to Bank of America, Coinbase shares represent a buying opportunity. Coinbase is expanding its business, and the company announced plans to acquire regulated crypto derivatives exchange FairX.
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