UPDATE: Coinbase Global Inc. (COIN) PT Raised to $51 at Goldman Sachs

Goldman Sachs analyst Will Nance raised the price target on Coinbase Global Inc. (NASDAQ: COIN) to $51.00 (from $45.00) while maintaining a Sell rating.

The analyst comments "While results and guidance came in significantly below expectations, much of this was already expected by investors, which we believe partially explains why the stock is not down more following much weaker 2Q results. That said, we believe shares are likely to underperform following the print, as we believe the lack of further cost reduction actions (headcount still up QoQ) as well as the backing away from the company’s prior EBITDA > -$500mn guardrail is likely to continue to feed into the bear narrative that COIN is facing both a significant cash burn as well as a high level of dilution from stock based compensation. On the more positive side, 1) the company provided a lot of disclosures around its balance sheet risk and cash burn, which we believe is likely to clear up some of the more bearish questions and investor uncertainty around cash balances and the various quarter to quarter balance sheet movements, on which we had fielded a number of questions during 2Q and 2) we believe COIN will likely see very significant increases in interest income as a result of its USDC economic interest and higher interest rates, which is likely to provide some offset to weaker transaction revenues. However, with the core business remaining under pressure and shares having bounced significantly off of the bottom, we believe valuation support is somewhat limited given, particularly given 1) the company will likely continue to burn cash, 2) net cash remains well below the current market cap, and 3) management has reiterated its desire to run the company at breakeven over the intermediate term. Thus, while we believe management has navigated the turbulence in crypto markets well in terms of building liquidity during the bull market and not taking outsized counterparty risk, we expect shares to underperform as long as retail engagement with crypto remains weak and regulatory uncertainty in the U.S. remains."

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