coindesk.com
Coinbase’s recent sell-off appears to be overdone as the stock lagged crypto prices, said Piper Sandler analyst Richard Repetto.
In a new note, he said COIN stock has also been hurt by news of a Wells notice from the U.S. Securities and Exchange Commission (SEC) over a forthcoming lending product from the crypto giant.
Coinbase shares are down 4% in 3Q, while bitcoin and ether prices have gained ~28% and ~43% respectively. Coinbase consensus estimates for 3Q appear to be too low, Repetto wrote.
While he cut his 3Q earnings per share (EPS) estimates to $2.08 from $2.21, he thinks most other analysts assumed “much lower” volume run rates given Coinbase’s pre-announced “soft” crypto volumes in July.
“We suspect most estimates will need to come up with the current 3Q21 consensus EPS estimate at $1.30,” Repetto wrote.
Read more: Coinbase Goes Public in Its Fight With the SEC
Repetto, who has an overweight rating and $335 price target on the shares, said the crypto exchange’s decision to delay Coinbase Lend until October doesn’t impact his forward estimates because he never modeled Lend into his current or future revenue estimates.
“While we don’t believe it’s in any company’s best interest to confront their regulators, still (1) COIN has a history of working in close collaboration with regulators and (2) we believe regulatory clarity & transparency is what the crypto industry could most utilize at this time,” Repetto wrote.