Wall Street’s Compass Point has recently started its coverage of the crypto platform Bullish, which is the parent company of CoinDesk, assigning a neutral rating and setting a price target of $45.
Although the analyst Ed Engel believes that Bullish’s competitive fee structure might allow it to compete with Coinbase in the U.S. market eventually, he expresses skepticism about the current stock valuation and market timing.
Key Developments
- Compass Point has rated Bullish neutrally while setting a price target of $45.
- Engel flagged that the stock is currently valued at 110 times the projected EBITDA for 2026.
- The analyst is doubtful about Bullish’s entry into the U.S. market until Congress enacts crypto market structure legislation, possibly anticipated by 2026.
Engel also pointed out the challenges posed by New York’s stringent BitLicense regulations. The company’s model, which allows it to act as its own market maker using an automated market maker (AMM), could raise potential conflict-of-interest issues in the eyes of regulators.
He speculates that there may be a better investment window within one to two quarters, noting the stock’s current valuation at a significant multiple in relation to its EBITDA projections for 2026.
Bullish holds a substantial $2.7 billion in crypto assets, primarily Bitcoin, which means that its stock performance is closely linked to Bitcoin’s price volatility. Engel reminds investors of Bitcoin’s notorious price fluctuations when considering the stock’s performance.
Engel’s estimated target of $45 is predicated on the assumption that Bitcoin will reach $160,000 and considers a 50% chance that Bullish will penetrate the U.S. market. This potential expansion could add around $12 per share according to Engel’s assessments.
Furthermore, Bullish went public in August at a starting share price of $37 and saw a dramatic rise to $68 on its launch day. However, shares dropped 4.6% on Wednesday, settling at $59.20.
