Coinbase stock jumps on analyst upgrade

Yahoo Finance Live discusses a rise in shares of cryptocurrency exchange Coinbase after Atlantic Equities upgraded the stock to 'overweight'.

Video Transcript

JULIE HYMAN: And another stock we're watching is Coinbase. Those shares are up 10%, after Atlantic Equities upgraded the stock from neutral to overweight. The analyst behind that call says, quote, "While risks remain in the form of a weak volume backdrop, the company's first quarter results confirmed management's focus on returning the business to sustainable profitability." And those shares are getting an 11% bump here this morning.

BRAD SMITH: Yeah. The firm talking about Coinbase, and within this price target, that they maintained $70, which still would be, like, a 23% move higher from the close that we saw on Friday of last week. They said, risks remain in the form of a weak volume backdrop, recession, regulation, and market prices. But they believe that Coinbase's recent actions allow investors to look through towards the longer term opportunity there. And saying, that those actions are building resilience in the business model.

And we've talked about a lot of the different levers that Coinbase has tried to pull, whether that is anything to drum up in a crypto Ice Age, as some have called it-- how they can drum up even more accounts, more sign-ups, more net users. And even within that, where they could have a place within staking, staking and the entire framework around that, especially with some of the newer upgrades to [? blockchains, ?] has changed as well, in proof of work versus, kind of, proof of staking. But then, additionally, even within those businesses, you're also thinking about Coinbase and how they're offering storage. The storage mindset has changed entirely as well, given-- not just some of the crypto hacks that have taken place-- but how people just want to be comfortable with the crypto that they've amassed, and ensuring that it's not at risk by sitting in a hot storage. And instead, trying to move that into a cold storage wallet.

JULIE HYMAN: Yeah. I mean, the other interesting thing here is that that Atlantic Equities analyst says that this is basically the best expression of crypto, in his words.

BRAD SMITH: Mm.

JULIE HYMAN: Bitcoin, today, isn't doing much. So it's interesting to see Coinbase up this much. So it's obviously not a perfect proxy. But interesting that he made that comment as well.

BRAD SMITH: Absolutely.