Coinbase (Nasdaq: COIN) was rated a new underperform with a $160 price target at Autonomous Research, which cited a lack of crypto innovation. Coinbase shares fell about 1%.
Coinbase is “rapidly” losing market share and seeing “significant take rate compression” as competition from other exchanges such as Robinhood, FTX and Binance intensifies, according to Autonomous Research analyst Christian Bolu.
Bolu said what’s most concerning is that Coinbase appears to be “lagging on almost every crypto innovation (including altcoins, derivatives, NFTs).” If this trend continues, he said, the crypto exchange could rapidly lose relevance similar to what happened to Netscape in the early internet era.
That said, Coinbase announced Tuesday it’s launching an NFT marketplace that will allow its users to buy and sell Ethereum-based digital collectibles by year’s end. Coinbase also added dogecoin rival SHIB in September after the “meme coin” surged in popularity. Last month, the exchange even took some first steps toward listing crypto futures products, filing to become a member of the National Futures Association and register as a futures commission merchant (FCM).
Autonomous Research’s appraisal of Coinbase’s prospects contrasts sharply with some other recent coverage of the exchange, including JMP Securities, which initiated Coinbase with an outperform rating and a $300 price target late last month. And just last week an analyst at Oppenheimer, who has a $440 price target, predicted the company would beat Wall Street consensus estimates for trading volume and total revenue for the third quarter.
The Autonomous Research analyst has a $160 price target on Coinbase, implying 35% downside from current levels.
Bolu also initiated Robinhood (Nasdaq: HOOD) with an outperform rating and $55 price target (38% upside), helped by increased monetization of crypto and lending.