Target price drops to $120: Coinbase (COIN.US) profit recovery is blocked

According to Woofun AI, Morgan Stanley (MS.US) sent a strong bearish signal to Coinbase (COIN.US) on Monday, drastically cutting its target share price from $258 to $120, a drop of about 53%, indicating that the cryptocurrency trading platform's profit recovery process will lag significantly behind the market's previous expectations.

Analyst Michael Cypress pointed out in the report that recent weak trading trends, bleak revenue prospects, and market uncertainty caused by Binance's $6.3 billion hacking attack together form the core logic of this rating downgrade.

Although Morgan Stanley (MS.US) maintains the position of Coinbase (COIN.US) as one of the strongest competitors in the crypto sector, it is expected that its profit recovery will fall short of previous predictions, which will continue to dampen stock price performance. This adjustment follows the third quarter earnings report of Coinbase (COIN.US) released on October 29. The data showed that its net revenue fell by about 34% year over year to only US$1.16 billion; thanks to cryptocurrency investment earnings, the company achieved net revenue of US$719 million and adjusted net revenue of US$78 million.

According to data compiled by Woofun AI, crypto-related stocks experienced a wave of sell-off on Friday. Affected by the Binance hacking incident, Coinbase (COIN.US) fell by more than 13% in the intraday period, Circle (CRCL.US) fell more than 9%, and Strategy (MSTR.US) fell about 8%.

At the time of writing, Coinbase (COIN.US) stock was still in a downward channel, falling more than 3.3% to $138. This valuation restructuring marks the agency's repricing of the profit certainty of cryptographic native assets. It is also a stress test of the market's ability to withstand the risks of leading exchanges following heightened regulatory uncertainty.