Benchmark is bullish on Exodus Movement amid 60% stock dip, rising self-custody demand
Quick Take The firm sees the recent 60% drop in Exodus Movement’s stock price as a buying opportunity, citing strong operating momentum and growing self-custody demand. Benchmark initiated coverage on the stock with a “buy” rating and $38 price target.
A sharp selloff and the largest crypto exchange hack in history make it a good time to buy shares of Exodus Movement , according to Benchmark. The company’s market capitalization has plummeted more than 60% over the past five weeks.
“We believe the recent pullback in the price of EXOD’s shares…has created a compelling opportunity for investors to gain exposure to a firm with strong operating momentum, the demonstrated ability to scale rapidly, and a tailwind from the more accommodative stance toward the crypto space in the U.S.,” Benchmark equity analyst Mark Palmer wrote Wednesday in a note to clients.
Founded in 2015, the company's core business revolves around the Exodus Wallet, a non-custodial wallet that enables users to store, manage and exchange over 1,000 cryptocurrencies.
“Self-custody crypto wallets give users full control over their private keys,” Palmer wrote. “The case for crypto self-custody was underlined a couple of weeks ago when centralized crypto exchange Bybit was the target of a record-breaking hack of 400k ether (worth ~$1.5bn) believed to have been executed by hackers working for the North Korean government.”
Exodus Movement derives about 85% of its revenue from the exchange aggregation feature within its crypto wallet, Palmer said, which consolidates liquidity from multiple third-party exchange API providers and “thereby offers users attractive rates and fast fulfillment times across more than 60,000 crypto token pairs.”
On March 3, Exodus Movement’s fourth-quarter earnings report featured strong preliminary results for the current quarter, including revenue of $44.8 million, up 143% year over year, and exchange provider processed volume of $2.33 billion, up 172%.
The company also said its preliminary exchange provider processed volume for January and February was $1.45 billion, already up $100 million from last year's entire quarter.
Palmer also touted the company’s “wallet-as-a-service” business, which leverages its aggregation technology in XO Swap, its crypto swap engine that it integrates into the platforms of partners such as Ledger and Magic Eden.
Palmer initiated coverage on the stock with a “buy” rating and $38 price target. Shares traded around $25.20 at publication time, according to The Block’s EXOD price data .
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Eli Lilly (LLY.US) "lowers its stance" and joins forces with former rival Hims (HIMS.US) to compete for the self-pay weight loss drug market
Eli Lilly is collaborating with Hims & Hers Health, leveraging the telehealth company’s large customer base to expand access to its blockbuster weight loss drugs and boost sales of medications, including its new oral weight loss drug Foundayo.
"Predicting Your Prediction" Intensifies Tech Stock Sell-off! After $2.3 Trillion Market Value Evaporates, Has the "Hot Money" Mechanical Selling Still Not Subsided?
The Nasdaq 100 Index fell by 6.4%, wiping out $2.3 trillion in market capitalization. The core reason behind this decline is concerns that a comprehensive victory by the Democratic Party could lead to stricter regulations on AI development. Systematic funds, which typically follow the stock market's trend and respond to price fluctuations and momentum signals, were thus forced to reduce their investments, accelerating the downturn. The selling pressure from systematic strategies may not be over yet; it is expected that in the coming days, portfolios targeting volatility will sell at least $50 billion worth of stocks.
The midterm election tears open the "abyss" of AI trading, facing a moment of reckoning for trillion-dollar capital expenditure narratives
For months, investors have been worried about a series of risks behind the AI (artificial intelligence) capital expenditure "money tree." This week, the market finally pressed the panic selling button.
AI sell-off meets the NFP test: safe-haven funds flock to the bond market! Will unexpectedly strong employment disrupt the bullish U.S. Treasury setup?
As expectations for further rate hikes by the Federal Reserve continue to diminish, bond traders are preparing for the upcoming October jobs report this Friday, with the U.S. Treasury market expected to rise further. The global stock sell-off has prompted investors to seek the safety of U.S. Treasuries, pushing yields down to their lowest levels since early September, with the 10-year Treasury yield reported at 4.82% on Friday.
Crypto prices
More
