Goldman Sachs (GS) expects most digital asset companies to miss revenue estimates when they report first-quarter earnings, and downgraded Robinhood (HOOD) to sell from neutral as Wall Street expectations for the company remain too high.
- Street estimates for Robinhood still have to come down, says the analyst team at Goldman, noting profitability in 2023 would require the difficult combination of 10% or more organic revenue growth plus macro tailwinds – this at a time when engagement is struggling.
- Goldman downgraded HOOD from neutral to sell, with $13 price target. Shares are down 6.3% Friday to $11.32.
- Goldman expects most digital asset players to miss Q1 revenue estimates, but says Coinbase (COIN) and Silvergate (SI) – along with HOOD – will be the furthest below the analyst consensus.
- For Coinbase, Goldman sees total Q1 trading volumes of $302 billion, a sizable decline from $547 billion in Q4. On the positive side, the crypto derivatives and non-fungible token businesses continue to build. Goldman maintained its buy recommendation on Coinbase’s stock.
- For Silvergate Capital, Goldman expects Q1 earnings to disappoint, particularly as the addition of Meta Platform’s (FB) Diem project assets could weigh on the company’s bottom line and book value in the near term. Goldman nevertheless maintained its buy rating on the shares.
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