By Sam Boughedda
KeyBanc Capital Markets analysts started Coinbase (NASDAQ:COIN) at Sector Weight with no price target on Monday, stating it is a "nice house" in a "not-so-nice neighborhood."
The analysts explained that the cryptocurrency exchange offers pure-play exposure to the digital asset ecosystem as an "innovative and trusted" service provider with a healthy capital position, a forward-thinking management team, and an ongoing commitment to user safety.
The analysts gave Coinbase "positive marks for a highly scalable model (62% peak adjusted EBITDA margin), innovative suite of products/services (e.g., multi-chain wallet, staking, Prime, etc.), and market share gains (~10% market share) are balanced by limited revenue visibility tied to crypto asset prices/volume/volatility and industry headwinds leading to depressed crypto asset prices and market activity."
"We appreciate Coinbase as a trusted category builder/innovator offering consumers and institutions a gateway to the cryptoeconomy and expect continued share gain across customer segments (retail, institutional) and complementary markets (e.g., self-hosted wallets, staking, int’l)," they added.
"That said, our visibility into historically highly variable revenue sources subject to crypto trading volumes, crypto asset prices, and other cryptorelated activity (e.g., staking, etc.) amid a "crypto winter" keeps us neutral on the stock."