Friday’s second-quarter earnings from Coinbase Global Inc (NASDAQ:COIN) provided a few "ouch" moments, including a year-on-year 60% decline in revenues and a decisive move into the red.
However, Wedbush, the west coast tech investment house, still managed to find reasons to be cheerful that support its bullish thesis on shares in the crypto exchange.
If this is the crypto winter, then Coinbase may be one of the last businesses standing once the thaw comes, Wedbush reckons.
This, ultimately, could put the company in a very powerful position long-term if the theory holds.
The Los Angeles-based wealth management and investment firm also cites recently inked partnerships with BlackRock Inc (NYSE:BLK), the investment manager, and Facebook-owner Meta Platforms Inc (NASDAQ:FB) as providing support to the Coinbase investment stance.
And of course, the US$6.2bn of reserves the group has on its balance sheet provides the financial underpinning for the business that should see it through the tough times, Wedbush points out.
It repeated its ‘outperform’ rating and US$100 price target in the wake of the quarterlies. That’s a 35% premium to the current US$74 share price.
Wedbush said it had adjusted its numbers for both 2022 and 2023 as a result of Friday’s quarterly report, which revealed that both revenues and EBITDA undershot the Street’s estimates ahead of the read-out.