Goldman Sachs analyst Will Nance downgrades to Sell from Neutral with a target price of $45.The analyst believes current crypto asset levels and trading volumes signify a “further degradation” of Coinbase revenue base, which he predicts will fall 61% year-over-year in 2022 and 73% in the second half of the year.
Although Coinbase recently announced a major restructuring, further cuts are needed as the announced cost-cutting efforts simply return headcount to late-Q1 levels and see the company move to the lower end of its previous spending forecast.
Coinbase will need to “substantially cut” its cost base to stop cash burn as retail investor trading activity dries up.