Investors weren't kind to the stock of Coinbase Global (COIN 1.42%) on Tuesday. They traded the shares down by 2.6%, a steeper fall than the S&P 500's 0.3% loss on the day. An influential analyst's price-target cut was a major reason.
Tuesday morning, high-profile Mizuho (NYSE: MFG) prognosticator Dan Dolev slashed his price target, pegging Coinbase as being worth $150 per share; previously that figure was $190.
Dolev believes that rivals such as Crypto.com are pushing into Coinbase's business as a cryptocurrency exchange operator, and due to that, market share is being ceded.
In a rather pessimistic assessment of the company's recent performance, Dolev wrote: "We found that [Coinbase's] share has fallen from a peak of 12% in the fall of 2021 to just 8% currently, with a steep drop in between March and April. We believe that had [Coinbase] not added as many tokens in [the fourth quarter], the same-store share of volume per token may have been even worse."
He singled out Crypto.com as a determined rival, noting that the company is running an aggressive marketing campaign that includes securing naming rights to the former Staples Center arena in Los Angeles.
As a result, the analyst is also reducing his 2022 revenue estimate for Coinbase. He now thinks the company will earn $6.8 billion on the top line this year, down from his previous forecast of $7 billion.
Dolev certainly makes some valid points, although we should bear in mind that Coinbase hasn't exactly been a slouch in the marketing sphere, either. Its "Less talk, more Bitcoin" ad campaign that featured a commercial during the Super Bowl attracted a lot of eyeballs and surely drew new users to the site. Still, competition is stiff, and the company has its work cut out defending that market share.