Benchmark Calls Coinbase’s Weak Q2 Results a Short-Term Blip
Coinbase's recent second quarter results led to a 16.7% drop in share price, but Benchmark views this as a buying opportunity. Analyst Mark Palmer maintains a buy rating and a $421 price target, citing the following catalysts for Coinbase's long-term growth:
- Revenue-sharing agreement with Circle enhances potential from USDC adoption post-GENIUS Act.
- Institutional offerings like prime brokerage and crypto-as-a-service align with expected growth from the CLARITY Act.
- Development of a crypto "super app" that integrates trading, payments, NFTs, DeFi, and developer tools.
- Integration of decentralized exchanges broadens token access.
- Estimated $360 million in transaction revenue for July, a 44% increase over the second-quarter average, indicates potential recovery in crypto activity.
Benchmark concludes the quarterly miss is a short-term issue, with Coinbase's evolving platform and regulatory support indicating long-term growth prospects.