For the second time this week, an analyst has become more bearish on the shares.
In contrast to the broader stock market, on Thursday the stock of Coinbase Global ( COIN -0.39% ) slumped. The company, a well-known operator of a cryptocurrency exchange, saw its stock price decline marginally by 0.4% on the day, due in no small part to an analyst’s price target cut.
It wasn’t exactly a deep cut, the one enacted by JMP Securities prognosticator Devin Ryan. He’s shaving his Coinbase target to $394 per share, from the previous $405. Ryan is not changing his recommendation on the stock, however; for him it remains a market outperform (in other words, buy).
Still, especially with relatively young companies in sectors with above-average volatility like cryptocurrency, even a slightly bearish move can have a negative impact on investor sentiment.
Also, Ryan’s trimming was the second time this week an analyst has gotten more negative on Coinbase. Tuesday morning, Mizuho’s Dan Dolev also reduced his price target on the stock. He now believes it’s worth $190 a pop, down from the preceding $220.
In particular, Dolev is concerned with Coinbase’s heated pursuit of the non-fungible token (NFT) business. In a new research note, Dolev expressed concern with “the strategic rationale of chasing NFTs” in a year when the company could lose half a billion dollars (the low end of the user guidance range).
“Our analysis of internet searches shows interest in NFTs has dramatically declined from its highs earlier this year,” he added.
Such sentiments are hitting home with Coinbase investors, hence the slight sell-off. Dolev’s point about NFTs is well taken — while enthusiasm for them apparently cools, many operators in the cryptocurrency and blockchain spaces are plunging into the business in a Gold Rush for fame and profit. Coinbase is sure to face very stiff competition no matter how well its efforts in the segment pan out.