Bernstein Boosts Coinbase Price Target 65% to $510 on Strong Earnings Outlook

Bernstein has raised its price target for Coinbase to $510, up from $310, attributing the increase to enhanced earnings forecasts, emerging growth avenues, and a new valuation approach. Coinbase, which is part of the S&P 500 index, benefits from its diversified services including US crypto trading leadership, custody for most Bitcoin ETFs, and its involvement in Base, Ethereum's growing Layer 2 system. The firm's recent agreements, like acquiring Deribit and earning from USDC transactions, align with US crypto legislation, predicting significant revenue growth. Despite competitive pressures, Coinbase maintains its market share and pricing, with projected revenues of $9.5 billion by 2025 and gains in profitability leading to higher earnings per share estimates.

Coinbase's strategic positioning within the US crypto market, combined with its leadership in various crypto services, has positioned it favorably for future growth. The company's involvement in Base, Ethereum's Layer 2 system, further solidifies its role in the evolving crypto landscape. Additionally, Coinbase's recent acquisitions and partnerships, such as acquiring Deribit and earning from USDC transactions, are expected to drive significant revenue growth. These developments align with the US crypto legislation, which is predicted to create a more favorable regulatory environment for the company.

Despite facing competitive pressures, Coinbase has managed to maintain its market share and pricing power. The company's projected revenues of $9.5 billion by 2025, along with gains in profitability, are expected to lead to higher earnings per share estimates. This positive outlook has contributed to Bernstein's decision to raise its price target for Coinbase to $510, reflecting the firm's confidence in the company's growth prospects and market strength.