Piper Sandler is reaffirming its bullish outlook on Coinbase even amid chaos within the cryptocurrency house given the fallout at FTX. “We consider COIN has a really sturdy money place and will even capitalize on the FTX chapter upheaval over the long run,” analyst Richard Repetto wrote in a Friday notice. The agency reiterated its chubby ranking and $100 value goal on shares of the crypto trade. The value goal implies that Coinbase might surge 120% from the place it at present trades. The inventory has plunged greater than 80% yr up to now. Nonetheless, despite the fact that Piper Sandler thinks Coinbase will outperform, it does see the necessity for extra aggressive headcount discount going ahead to handle bills and maintain shareholder worth if an prolonged “crypto winter” outcomes from the FTX fallout. Headcount trim The corporate has a a lot bigger headcount than rivals akin to Robinhood. “At YE2021, COIN reported a headcount of three,730 — not far off from eBroker peer Robinhood (HOOD) which reported ~3,800 workers at YE2021,” stated Repetto. “Nonetheless, regardless of an 18% (1,100 worker) discount in power (RIF) in June, COIN’s headcount has nonetheless elevated ~26% YTD to 4,706 (at 3Q22 finish) as a consequence of aggressive intra-quarter hiring in 2Q22.” He additionally famous that earlier within the yr, Robinhood aggressively lowered its worker headcount by 37% to about 2,400, which is about half of Coinbase’s worker roster. Coinbase is on monitor to fulfill its purpose of an adjusted earnings lack of lower than $500 million for the total yr 2022. However, Robinhood reached profitability prior to anticipated due to aggressive value slicing, which Coinbase could wish to contemplate, Repetto famous. “COIN has argued that its elevated adjusted EBITDA “profitability” in 2021 warrants extra tolerance of the losses skilled in 2022,” he stated. “Nonetheless, with the FTX chapter driving incremental crypto headwinds, we consider value reductions to be a extra viable & maybe extra acceptable technique.” Crypto winter contingency Nonetheless, indicators level to the present crypto winter being close to an ending level that would assist increase Coinbase. “Utilizing historical past as a information and ignoring macroeconomic (rates of interest), regulatory, geopolitical components, we might be close to a backside on this crypto winter,” stated Repetto. “And whereas the affect on crypto costs from potential chapter liquidations (e.g. FTX, blockfi, and many others.) might weigh on investor sentiment and adoption curves for a while, the potential for a near-term FED pivot might ship crypto costs increased (i.e. danger on asset rally) which might seemingly be a optimistic for COIN’s buying and selling volumes,” he added. And, if the crypto winter is just not over quickly, Piper Sandler famous that Coinbase CFO Alesia Haas stated the corporate has contingency plans in place to climate the storm.