Coinbase’s direct listing is ‘an Amazon moment for crypto,’ and will bring cryptocurrency further into mainstream finance, D.A. Davidson says

Coinbase Founder and CEO Brian Armstrong
Coinbase Founder and CEO Brian Armstrong

  • Coinbase’s upcoming direct listing will be an “Amazon moment” for cryptocurrencies, according to D.A. Davidson. 
  • The firm initiated coverage of the crypto exchange with a “buy” rating and $195 price target. 
  • D.A. Davidson said the public debut will be a milestone for the convergence of cryptocurrency and traditional finance.
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Coinbase’s upcoming direct listing will be a milestone event, marking the covergence of cryptocurrency and traditional finance, according to a team of D.A. Davidson analysts. 

In a recent note D.A. Davidson initiated coverage of the cryptocurrency exchange with a “buy” rating and a price target of $195. Analysts led by Gil Luria said Coinbase’s public debut will be the “Amazon moment for crypto,” as cryptocurrency will move from “a large curiosity to becoming the future path for much of the financial system.” 

Coinbase will be the first major cryptocurrency exchange to go public. According to the analysts, the exchange’s superior user experience has positioned it as the “leader” in facilitating the onramp/off-ramp from government currency (like dollars) in crypto (like bitcoin.)

“With a big target on its back as a crypto wallet, (to date) Coinbase has been able to manage both government regulators as well as highly motivated hackers, while providing consumers with the experience they expect from a large financial institution,” the analysts added.

As both an exchange and broker, Coinbase’s competition includes Grayscale, Kraken, and Gemini, as well as broader consumer digital wallets like Square, PayPal, and Robinhood, said D.A.Davidson.

The firm’s $195 price target is based on 2021 revenue estimates, but the firm has not been able to connect with Coinbase during its quiet period. Revenue in 2020 was $1.28 billion, a jump from $553.7 million in 2019, according to a consolidated operations statement included in Coinbase’s filings.

For the year ended December 31, 2020, transaction revenue represented over 96% of net revenue. Bitcoin has soared 68% in 2021 and it’s unclear how that affects revenue estimates.

D.A. Davidson noted Coinbase is a more speculative investment than other companies it covers. They also noted the unusually high risks associated with the volatility of crypto prices, and said it’s too early to tell if Coinbase will actually become the Amazon of crypto or the Netscape.

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Zoom could soar another 57% as work-from-home will continue long after the pandemic era, says a senior stock analyst

FILE PHOTO: Small toy figures are seen in front of diplayed Zoom logo in this illustration taken March 19, 2020. REUTERS/Dado Ruvic/Illustration
Small toy figures are seen in front of diplayed Zoom logo

  • D.A. Davidson’s Rishi Jaluria believes Zoom will be an essential product long after the coronavirus vaccine is deployed and workers return to offices. 
  • The managing director and senior research analyst told CNBC on Wednesday Zoom could surge another 57% to $600 following its incredible rally this year. 
  • No one is going to be a hundred percent remote or 100% in the office, and I think zoom for example, is a critical part of making that happen,” the analyst said.
  • Shares of Zoom slipped as low as 6.9% shortly after the Wednesday opening bell. 
  • Watch Zoom trade live here.

D.A. Davidson’s Rishi Jaluria believes Zoom will be an essential service long after the coronavirus vaccine is deployed and workers return to offices. The managing director and senior research analyst told CNBC on Wednesday Zoom could surge another $600, a 57% upside from current levels, following a massive rally this year.

Jaluria explained that the nature of work has been “irreversibly changed” by the coronavirus pandemic, and he anticipates that the future of work will be a hybrid of remote and in-person activity.

“No one is going to be a hundred percent remote or 100% of the office, and I think zoom for example, is a critical part of making that happen,” the analyst said.

If investors had to name one stock of the year for 2020, it’d likely be Zoom. The virtual conferencing software company skyrocketed roughly 500% this year as video calls went from a less-adequate substitute for a “real” meeting to the only way to conduct business. 

After such an massive rally, some investors may be doubtful that the stock could go any higher. But Jaluria said the benefits of Zoom will be long-lasting. 

Read more:We spoke to short-seller Rob Majteles, who says he was ‘wrong early’ on Tesla, but he still believes the market is due an ‘extraordinary reassessment’

Zoom has pared back some gains from its highs in October, and Jaluria said now is a great buying opportunity for the company. Shares dropped 6.9% shortly after the open on Wednesday to as low as $380.

The analyst added that he sees opportunities in other work-from-home stocks including Fastly, Twilio, Docusign, and RingCentral, which are all providing necessary services for enabling the hybrid work future, he said.

“I do think a lot of these names have a good amount of upside, especially because I feel like the market is starting to actually trade down a lot of these work from home names because they think post pandemic, that benefit fades away,” said Jaluria. “And as we think about this future of work, I think it’s fair to say that these benefits aren’t short-term, they are very long lasting [and] irreversible.” 

Read more:UBS says buy these 20 discounted small-cap and mid-cap stocks expected to take off in 2021 – including one that could rally 60%

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Airbnb and DoorDash sink as analysts turn skeptical of massive IPO rallies

airbnb ipo nasdaq
The Airbnb logo is displayed on the Nasdaq digital billboard in Times Square in New York on December 10, 2020. – Home-sharing giant Airbnb was set for its Wall Street debut Thursday with a whopping $47 billion valuation amid a feverish rush for new shares in companies adapting to lifestyle changes imposed by the coronavirus pandemic. (Photo by Kena Betancur / AFP) (Photo by KENA BETANCUR/AFP via Getty Images)

  • Airbnb and DoorDash shares fell on Monday after analysts downgraded the newly public companies’ stock.
  • Both firms surged last week as outsized demand pushed prices well above their IPO levels.
  • Gordon Haskett downgraded Airbnb to “underperform” from “buy,” and expects shares to fall roughly 20% from current levels.
  • DA Davidson lowered DoorDash to a “neutral” rating from “buy,” adding that the company’s stock price leaves little room for future error.
  • Watch DoorDash trade live here.
  • Watch Airbnb trade live here.

Airbnb and DoorDash both tumbled on Monday as analysts downgraded ratings following both firms’ colossal public-market debuts.

Airbnb sank as much as 10.1%, while DoorDash plunged 13.6% at intraday lows. The two companies collectively raised $6.7 billion in back-to-back initial public offerings last week, capping a record year for IPOs. Massive demand for the firms’ shares fueled massive gains in their first days of trading, but analysts covering the companies are growing concerned that the stocks climbed above rational trading levels. 

Gordon Haskett changed its rating for Airbnb to “underperform” from “buy” on Monday, eschewing the bullish outlook he held for the firm just one week ago. The home-sharing company’s valuation is “more than stretched” after more than doubling in its Thursday debut, the firm said. Airbnb also trades at two times its estimated gross bookings value, where the average online travel group trades at a 0.6 multiplier, Gordon Haskett said.

The firm lifted its price target to $103 from $77, but the level still implies a roughly 20% drop from current levels.

Read more: Shark Tank investor Kevin O’Leary told us 2 concrete strategies for building wealth over time – and shared how a rude awakening during the pandemic led him to build a new investing app

Separately, DA Davidson downgraded DoorDash to “neutral” from “buy” following the firm’s 86% opening rally. The firm still feels DoorDash deserves to trade at a premium multiple due to its leadership in the food-delivery sector but noted its stock price leaves little room for error.

DA Davidson boosted its price target for DoorDash to $150 from $93. That level implies a slight drop from the stock’s current price. No other analysts have initiated ratings on DoorDash shares. 

Despite the shift in analyst sentiments and Monday losses, both companies still trade well above their IPO prices. Their rallies have fueled new scrutiny of market optimism, with some strategists concerned that the outsized demand for new issuances is a symptom of dot-com-era greed.

DoorDash traded at $157.51 as of 3:10 p.m. ET Monday. Airbnb traded at $129.33.

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Read the original article on Business Insider