Coinbase stock hit an all-time high on Monday—echoing Bitcoin’s own record move—just short of $400, the price target set by Argus Research in a note published earlier in the day.
Analysts Kevin Heal and Masako Inagaki labeled the crypto exchange a buy, calling it “promising,” despite its premium valuation.
The stock closed at $394.22 on Monday after hitting a record of $398.50, according to Yahoo Finance. Coinbase now has a market cap north of $100 billion.
“On the fundamentals, [COIN] shares are off the charts,” the analysts said in the note. “That said, we believe that COIN’s margins are higher than the peer group and its growth runway is promising, justifying the premium, at least in the near term and during a bull market.”
The stock has risen 60% over the past month, buoyed by a more favorable political environment for the crypto industry, rising prices for digital assets, and its own series of acquisitions that will allow it to expand its services.
This week, Citizens JMP adjusted its price target for COIN to $400 from $475, underscoring its long-term positive outlook for the stock even as it revised its valuation. Last month, Bernstein boosted its price target for Coinbase 65% to $510, calling the stock “misunderstood.”
In their note, the Argus analysts underscored the trading platform’s “impressive record of growth,” including its 76.45% revenue growth year-over-year and its maintenance of an 85.25% gross profit margin.
The bullish rating comes as the U.S. House of Representatives is expected to pass a regulatory framework for stablecoins this week called the GENIUS Act, likely boosting the more than $250 billion stablecoin market. According to Argus, the bill could also act as an “impetus to growth” for Coinbase, which rakes in 50% of stablecoin issuer Circle’s USDC reserves revenue under an existing business agreement between the two firms.
The U.S.’s largest crypto exchange by daily trading volume has also continued on a research and development spree that includes the recent unveiling of its Bitcoin-rewards credit card and its plans to launch Coinbase Payments, a stablecoin payments solution for e-commerce transactions, according to Argus.
“We expect recent investments to generate continuing growth in daily users,” the analysts said. Coinbase has traditionally amassed the bulk of its revenue from the trading fees it charges its retail customers.
Coinbase also unseated Discover Financial Services on the S&P 500 in May, making it the first crypto firm to be listed on the index, analysts noted. They added that the firm’s inclusion “should provide further support for the shares.”
Despite that bullish outlook, the analysts acknowledged some risks to COIN shares, noting that the exchange’s stock is trading at a premium compared to ICE, NDAQ, CME, and CBOE.