Coinbase Has ‘Hidden Value’ in Ventures Business, Oppenheimer Says
Crypto exchange Coinbase’s stock is undervalued, the investment bank said in a note to clients.
Mar 14, 2022 at 5:30 p.m. UTC:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/TH7Y3E5ZHNA4VN2T5MPMPD4YXA.jpg)
Coinbase Posts $1.9B in Q2 Transaction Revenue, Beating Estimates
Cryptocurrency exchange Coinbase (COIN) has “hidden value” in its Coinbase Ventures unit that investors have yet to fully appreciate, Owen Lau, an equity research analyst at Oppenheimer, said in a note to clients.
- Coinbase Ventures’ investments aren’t yet contributing financially to Coinbase but are “strategically important” to the company because they support the broader crypto ecosystem and add insight to emerging technologies, Lau said.
- Oppenheimer estimates the fair value of Coinbase’s Venture portfolio is $6.6 billion. Coinbase had invested in over 250 companies through the fourth quarter of 2021, with a carrying value of about $352 million at cost basis, the bank noted.
- “Our sensitivity analysis shows that the market value could go as high as $17.0B, assuming a 13% ownership stake,” Lau wrote. “Given the continuous capital influx to blockchain/digital assets, there is potential upside to our estimate.”
- Lau has an outperform recommendation and $377 price target on Coinbase’s stock. Near term, the share price is likely to be dictated by the price of bitcoin along with macroeconomic pressures, he added.
- Coinbase shares are down about 39% year to date, trading at roughly $151 per share.
DISCLOSURE
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
:format(webp)/downloads.coindesk.com/arc/failsafe/user/1x1.png)
Michael Bellusci is CoinDesk's crypto reporter focused on public companies and digital asset firms.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.