Goldman Sachs analyst Will Nance downgraded Coinbase to Sell from Neutral with a price target of $45, down from $70. The analyst believes current crypto asset levels and trading volumes imply “further degradation” in Coinbase’s revenue base, which he sees falling 61% year-over-year in 2022 and 73% in the back half of the year. While Coinbase recently announced a significant restructuring, further cuts are needed, as the announced cost reduction effort merely brings headcount back to end of Q1 levels and resulted in the company moving to the low end of its previous expense guidance, Nance tells investors in a research note. The analyst believes Coinbase will need to make “substantial reductions” in its cost base in order to stem the resulting cash burn as retail trading activity dries up. Given the “continued downdraft” in crypto prices and the resulting fall in industry activity levels, he downgrades the shares to Sell.
previous post