Compass Point Cuts Coinbase Price Target Ahead of Expected Stocks, Prediction Market Reveal

Core Viewpoint - Analysts at Compass Point believe that tokenized stocks may present a larger revenue opportunity for Coinbase compared to prediction markets, while also lowering the price target for COIN shares from $266 to $230 [1][2]. Revenue Potential - Coinbase could potentially generate $210 million from prediction markets and $230 million from tokenized stocks, although it may take years for this revenue to materialize [2]. - The majority of revenue from prediction markets is estimated to be around $200 million, based on a charge of 1¢ per contract traded [5]. Market Position and Competition - Coinbase is expected to offer tokenized equities to U.S. customers, entering a competitive market among eBrokers, where it may adopt a payment-for-order-flow model [4]. - The analysts express skepticism about users shifting their trading from existing platforms unless Coinbase's stock trading offers similar benefits as traditional eBrokers [5]. Stock Performance - Coinbase shares fell over 5% to $252, while the stock has only increased 1.7% year-to-date, significantly lagging behind Robinhood's stock, which has surged 215% to $118 [3]. Strategic Partnerships - Coinbase has formed a coalition with Robinhood and Kalshi to establish clear rules for prediction markets, indicating a collaborative approach to market entry [7].