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Coinbase Global, Inc.
COIN Details
Coinbase Global, Inc. (NYSE: COIN) is a financial technology company that provides end-to-end financial infrastructure and technology for crypto-economy, a transparent financial system enabled by crypto that leverages crypto assets. The company offers primary financial accounts to retail investors to invest, store, spend, earn, and use crypto assets. It also provides technology platforms and services to developers, merchants, and asset issuers to build applications leveraging crypto protocols, participate in crypto networks and securely accept cryptocurrencies as payment. In Q1FY21, the US accounted for 81.36% of COIN’s total revenue. As of July 20, 2021, the company’s market capitalization stood at USD 46.03 billion.
Convertible Senior Notes due 2026: On May 19, 2021, COIN announced the pricing of a private offering of USD 1.25 billion aggregate principal amount of 0.50% senior convertible notes due 2026. Net proceeds from the offering are expected to be USD 1.22 billion after deducting initial purchasers’ discounts and commissions and estimated offering expenses. The initial purchasers have also been granted a 30-day option to purchase an additional USD 187.5 million of notes to cover over-allotments. These notes will be converted into COIN’s Class A common stock at the conversion rate of 2.6994 shares per USD 1,000 principal amount of notes.
Q1FY21 Results: The company reported a massive increase of 844.82% in net revenue to USD 1.80 billion in Q1FY21 (ended March 31, 2021) compared to USD 190.63 million in Q1FY20, attributable to increased Monthly Transacting Users (MTU) (6.1 million in Q1FY21 vs. 1.3 million in Q1FY20) with a subsequent increase in trading volumes (USD 334.74 billion in Q1FY21 vs. USD 29.83 billion in Q1FY20). COIN’s adjusted EBITDA rose 19x to USD 1.12 billion in Q1FY21 in contrast to USD 55.0 million in Q1FY20. In addition, the net income for Q1FY21 was USD 771.46 million vs. USD 31.97 million in Q1FY20.
Key Risks: All of COIN’s revenue is dependent on the pricing of crypto assets and transaction volume on its platforms, which is highly volatile and unpredictable. Any prolonged decline in these metrics could impair its financial performance. In addition, the company derives a majority of its revenue from transactions in Bitcoin and Ethereum, and any decline in the demand for these assets without them being substituted by any other crypto asset could hurt its financials.
Outlook: As of Q1FY21, COIN expects its average MTUs in FY21 to be in the range of 5.5 – 9.9 million. It also anticipates its annual average net revenue per user to exceed its 2-year historical range of USD 34 – 45 per month.
Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation
(Analysis by Kalkine Group)
COIN Daily Technical Chart (Source: REFINITIV)
Stock Recommendation: COIN’s stock price has decreased 1.89% in the past one month and is currently leaning towards the lower end of the 52-week range of USD 208.0 to USD 429.54. The stock is currently trading below its 50 DMA level, and its RSI Index is 42.84. We have valued the stock using the EV/EBITDA-based relative valuation methodology and arrived at a target price of USD 193.69. Hence, we have chosen to remain on the sidelines and will reevaluate the thesis upon stability in the crypto-economy and pricing of crypto assets. Therefore, we recommend an “Avoid” rating on the stock at the closing price of USD 224.96, up 1.97% as of July 20, 2021.
* All forecasted figures and Industry Information have been taken from REFINITIV.
* The reference data in this report has been partly sourced from REFINITIV.
VistaGen Therapeutics, Inc.
VTGN Details
VistaGen Therapeutics, Inc. (NASDAQ: VTGN) is a clinical-stage biopharmaceutical company focused on developing and commercializing drugs to treat anxiety, depression, and other central nervous system disorders (CNS). Its main pipeline products are 1) PH94B, a neuroactive nasal spray that has the potential to treat multiple anxiety disorders, which is in Phase III clinical trial for social anxiety disorder (SAD), 2) PH10, a stand-alone neuroactive nasal spray treatment for major depressive disorder (MDD), currently preparing for Phase 2b development, and 3) AV-101, a developmental drug for the treatment of MDD, suicidal ideation, neuropathic pain, levodopa-induced dyskinesia (LID) and epilepsy. The company has also developed a human pluripotent stem cell (hPSC) technology platform, CardioSafe 3D, to predict the potential heart toxicity of new chemical entities (NCEs).
FY21 Results: VTGN reported total revenue of USD 1.09 million for FY21 (ended March 31, 2021), as a result of the AffaMed agreement signed in June 2020, as opposed to nil revenue in FY20. The company incurred research and development expenses of USD 12.48 million in FY21, compared to USD 13.37 million in FY20. The reduction was attributable to the completion of Phase 2 clinical study of AV-101 in MDD in FY20, offset by increased development expenses for PH94B and PH10. In addition, General and administrative expenses decreased by USD 0.88 million to USD 6.55 million in FY21 due to increased employee-related expenses, offset by non-cash stock-based compensation. Net loss for FY21 amounted to USD 42.32 million vs. USD 22.04 million reported in FY20.
Key Risks: VTGN's prospects are dependent on the success of its three CNS product candidates, PH94B, PH10, and AV-101. It has invested a significant number of resources in their development. If it fails to obtain marketing approvals or cannot set up an efficient manufacturing and distribution mechanism, its results of operations could be adversely impacted. Further, the company does not have a manufacturing facility of its own and is dependent on third-party suppliers to produce its drugs. This may hamper its ability to meet product demand and can affect its business as a whole.
Outlook: In its FY21 Report, VTGN stated that it expects to start PALISADE-2, the second U.S. Phase 3 study for PH94B for the acute treatment of anxiety in adults with SAD in H2CY21. It also plans to begin with a Phase 1B clinical study to evaluate AV-101 in combination with probenecid in H2CY21 and prepare for phase 2B clinical development of PH10 in mid-2022.
Valuation Methodology: EV/Sales Multiple Based Relative Valuation
(Analysis by Kalkine Group)
VTGN Daily Technical Chart (Source: REFINITIV)
Stock Recommendation: VTGN’s stock price has increased 33.73% and 16.58% in the past three months and six months, respectively, and is currently leaning towards the higher band of the 52-week range of USD 0.56 to USD 3.56. The stock is currently trading between its 50 and 200 DMA levels, and its RSI Index is 43.86. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 2.05. Hence, we have chosen to remain on the sidelines and will reevaluate the thesis upon further improvement in the topline and profitability. Therefore, we recommend an “Avoid” rating on the stock at the current price of USD 2.73, up 0.66% as of July 20, 2021, 2:11 PM ET.
* All forecasted figures and Industry Information have been taken from REFINITIV.
* The reference data in this report has been partly sourced from REFINITIV.
Disclaimer
The advice given by Kalkine Canada Advisory Services Inc. and provided on this website is general information only and it does not take into account your investment objectives, financial situation and the particular needs of any particular person. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. The website www.kalkine.ca is published by Kalkine Canada Advisory Services Inc. The link to our Terms & Conditions has been provided please go through them. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations later.
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