Coinbase stock price seen to hit $600

After setting records just this Wednesday, Coinbase is yet to show its full potential in the market, or at least that’s what some analysts believe.

While it was pretty impressive to have the company saw its valuation nearly hit $100 billion after shares opened trading at $381, an analyst says that share price can still have around 60% climb to reach $600.

It is for this reason that MofferrNathanson analyst Lisa Ellis stated that the stock is a “must-own” for any long-term growth investor today. She said that Coinbase, as the U.S. listed large-cap stock, is a stock worth investing in.

The Road to $600 Stock Price

To back her statements, Ellis went on to explain that she predicted the $600 price target by applying a 20-times forward multiple to the projected 2023 revenues of Coinbase.

She also accounted for a predicted 35% decline to transactions involving cryptocurrencies come 2022, assuming Bitcoin once again experiences a rise and fall trend given its boom-and-bust nature.

Almost all predictions point to Coinbase not being able to keep its nine-fold, year-over-year growth in revenue shown during the first quarter of the year, but still, there’s a lot of interesting things to watch out for in Coinbase’s value.

A Bumpy Ride for Coinbase

Owing to the fact that Coinbase established ties with the crypto markets, Ellis said that it’s going to be a bumpy ride for the company.

She explained that Coinbase is different from other tech stocks because of its high correlation to volatile cryptocurrency prices, adding that those looking to invest in it must have a “strong stomach” and willing to gut their way out of foreseen peaks and valleys in trading.

In her model, Ellis said she saw a 35% drop in trading volumes of Coinbase owing to what happened in 2018 when Bitcoin saw an 80% fall after reaching its previous all-time high back in 2017.

 

Image courtesy of Coinbase/YouTube Screenshot

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