Coinbase (COIN) concluded 2024 with strong business momentum, aided by improving sentiment in the digital asset sector, JMP noted in a research report released Thursday after the exchange’s fourth-quarter results.

In response to the report, JMP raised its price target for Coinbase to $475 from $400 and reiterated its market outperform rating on the stock. However, shares fell 1.3% to $294.30 in early trading, following an 8.4% rally the previous day.

The analysts at JMP, led by Devin Ryan, believe that the market may be undervaluing Coinbase’s future potential.

“If transaction volumes continue at the current pace, first-quarter 2025 revenues could surpass Wall Street’s current consensus by nearly 30%,” the report highlighted.

JMP sees a significant transformation happening in the industry, and Coinbase’s current momentum might not fully reflect the broader changes yet to come.

The firm is optimistic about Coinbase’s long-term growth, forecasting that the company will expand substantially over the next five years.

“Favorable regulatory and legislative developments are setting the stage for crypto’s next chapter,” the report added.