Investing.com -- B Riley analysts initiated coverage of Coinbase (NASDAQ:COIN) with a Neutral rating on Wednesday, expressing optimism about the crypto exchange but pointing to valuation concerns and regulatory uncertainty.
The firm set a 12-month price target of $185, based on a 50x multiple of its 2025 EPS estimate.
"COIN is the industry leader and a trusted platform for institutions and individuals to invest and transact in the growing digital currency economy," B Riley wrote.
The analysts highlighted Coinbase's unique position as both a first mover in the shift toward digital assets and "a well-capitalized scale operator" within the capital markets sector.
B Riley emphasized the broader trend toward cryptocurrency adoption, describing it as "a once-in-a-generation global shift" from traditional fiat money to network-based currencies. However, the firm cautioned that this transition remains in its early stages.
The report also noted that Coinbase's earnings have historically been volatile, driven by the platform's strong correlation with digital asset prices like Bitcoin.
"Since going public, COIN's EPS power has been volatile, swinging from strong profits to losses and vice versa," B Riley stated.
Despite Coinbase's leadership in the crypto space, B Riley expects the stock to trade within a narrow range for the foreseeable future.
"We expect COIN shares to remain range-bound until the election is decided and regulatory clarity is provided or until better idiosyncratic catalysts emerge that provide visibility into more consistent profit growth," the analysts explained.
Given these uncertainties, B Riley's neutral stance reflects a wait-and-see approach as investors seek more stable profit growth and clearer regulatory signals for the crypto sector.
