Coinbase (Coin) is more than just a crypto trading platform, Wall Street broker Cantor said in a research report Tuesday that it has begun compensation for its stocks.
Cantor took on crypto exchange coverage with overweight ratings and price targets of $245. In early trading, stocks rose more than 5%.
“The market is missing out on what it’s going beyond trading, especially in the relationship between the L2 (base) and the circle,” writes analysts Brett Noblauch and Thomas Shinsuke. The report added that Coinbase stock is attractive at its current level and is trading at a discount of around 32% on past valuation times.
Brokers see both of these segments as “helping in the narrative surrounding coins, from surrounding crypto trading platforms to being mission-critical infrastructures in the crypto economy.”
The report says that stocks are expected to receive a higher valuation as investors increase visibility into the base and the potential for stable earnings.
Base gives Coinbase an edge, the report said. The growth of strong user in Layer 2 creates a “flywheel effect” that will benefit crypto exchanges with more transaction fees.
Cantor said the Stablecoin opportunities are also underestimated by the market, especially given the possibility that these cryptocurrencies could drive away traditional financial cross-border payment rails.
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