Deutsche Bank Upgrades Bullish Stock to Buy Amid U.S. Expansion Plans

TLDR

• Deutsche Bank upgraded Bullish’s stock to “Buy” with a target price of $51, about 40% higher than its current trading price.
• The upgrade followed Bullish’s third-quarter revenue beat, even though it missed profit expectations.
• Brian Bedell of Deutsche Bank sees the 51% drop in Bullish’s stock since August as an investment opportunity.
• The bank emphasized Bullish’s expansion into the U.S. market and its strong position in crypto infrastructure.
• Bullish launched crypto options trading and U.S. spot trading during Q3, contributing to its revenue growth.

Deutsche Bank has upgraded its stance on Bullish, advising investors to buy the crypto exchange’s stock. The decision comes after Bullish reported stronger-than-expected third-quarter revenue, despite not meeting profit expectations. The bank now has a target price of $51 for Bullish’s stock, a slight decrease from its previous target of $52, but still about 40% higher than the current trading price.

Deutsche Bank Sees Bullish Stock as Attractive

Deutsche Bank’s Brian Bedell highlighted that the 51% decline in Bullish’s stock since August creates an opportunity for investors. He explained that the stock’s price is now 5% below its IPO price of $37, making it more appealing. Bedell stated,

The price drop follows a broader downturn in the crypto market. Bitcoin, for example, slid from $125,000 in early October to around $89,000 in mid-November. Despite this, Bedell maintained that the stock’s recent performance has made it an attractive investment, especially given its expansion in the U.S.

Deutsche Bank’s upgrade emphasises the crypto exchange’s future growth potential, especially in its expansion into new business areas. The bank believes Bullish is well-positioned in the crypto industry and has a strong strategy going forward. Bedell’s note concluded that Bullish has a positive fourth-quarter outlook, supporting the buy recommendation.

Bullish’s Third-Quarter Results Exceed Expectations

Bullish posted a third-quarter revenue that exceeded analysts’ forecasts. However, the company’s profits did not meet expectations, leading to a 3.6% drop in the stock price during the trading session. Despite the earnings miss, Deutsche Bank’s Bedell called the results “good overall,” particularly pointing out the positive fourth-quarter guidance provided by the company.

Bullish’s recent quarter saw the company launch its crypto options trading and U.S. spot trading businesses. The company has signed several institutional clients and gained traction in crypto indices. The firm also expanded its liquidity services, further solidifying its market position.

Tom Farley, CEO of Bullish, stated, “Bullish had a highly successful third quarter.” He highlighted that the launch of new trading products and the expansion into the U.S. were key factors in the firm’s growth. Farley also pointed out the company’s success in the crypto options market, which had already crossed $1 billion in volume.

Bullish’s strategy remains focused on its U.S. expansion and its role as an infrastructure provider for traditional finance firms entering the crypto market. Deutsche Bank’s Bedell highlighted the company’s strong momentum in both trading and fee-based revenue streams. He also pointed out that Bullish’s cost discipline and strong margins in new business lines should continue to support growth moving forward.

Bullish’s CFO, David Bonanno, emphasised the strong momentum the company is seeing, forecasting revenue between $47 million and $53 million for the fourth quarter. Adjusted operating costs are expected to range from $48 million to $50 million. Bonanno expressed confidence in Bullish’s ongoing success, stating, “Bullish continues to win.”

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