Coinbase Global (COIN -0.06%) extended its losing streak and plunged this morning, trading down 4.5% as of 12:20 p.m. ET. The cryptocurrency exchange company has fallen out of favor with several analysts in recent days, and today was no different.
This morning, Oppenheimer analyst Owen Lau slashed Coinbase stock's price target to $314 a share from $377 per share while maintaining an "outperforming" rating on the stock, according to TheFly.com. Lau noted how Coinbase isn't having a "good start" to 2022, with its shares having crashed nearly 42% year to date at the time of the analyst's note. That's a huge laggard to the S&P 500 as well as Bitcoin's year-to-date performance.
It's true that shares of Coinbase have come under tremendous selling pressure in recent weeks. Low trading volumes, rising competition, and regulatory risks are just some of the reasons Lau flagged.
Just last week, Mizuho analyst Dan Dolev expressed concerns about how Coinbase might be losing market share as more rivals emerge, including Crypto.com.
Meanwhile, cryptocurrency exchange volume has dropped significantly since November of last year, according to data from digital assets news and research portal The Block, which reported cryptocurrency volume of $739.4 billion for the month of March versus $1.4 trillion for November 2021. As an exchange that earns income in the form of fees from cryptocurrency trades, Coinbase's growth prospects are tied deeply to investor sentiment around cryptocurrencies.
Despite several analysts recently slashing their price targets on Coinbase, it's worth noting that most still see a strong upside in the stock. Oppenheimer's Lau, for example, still expects Coinbase stock to more than double in value over the next 12 months. Coinbase's foothold in a disruptive industry also explains why popular investors like Cathie Wood continue to buy Coinbase shares now that they've fallen so hard so fast. Growth investors perhaps expect more, and that's reflected in Coinbase stock's fall today.