Coinbase (COIN) is more than just a Crypto trading platform, Wall Street Broker Cantor said in a research report on Tuesday and initiated coverage of the stock.
Cantor took over coverage of crypto exchange with an overweight assessment and a price target of $ 245. In early trade, the shares increased more than 5%.
“Markets lack what it does beyond trading, especially with its L2 (base) and its stablecoin relationship with circle,” analysts Brett Knoblauch and Thomas Shinian wrote. Coinbase shares are attractive at current levels as they trade with about a 32% discount on historical valuation multipling, the report added.
The broker sees both of these segments as “instrumental to change the story of the coin, from being a cyclic crypto-trade platform to being a mission-critical infrastructure in the crypto economy.”
The report said the shares are expected to recycle higher when investors have increased visibility in the earnings potential for the basis and stablecoins.
The base gives Coinbase an edge, the report says. LAGE 2’s strong user growth creates a “flywheel effect” that benefits the crypto exchange with multiple transaction fees.
Cantor said the stablecoin option is also underestimated by the market, especially given the potential of these cryptocurrencies to displace traditional funding cross-border payment rails.
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