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A tough day on the ASX has led these two gold mining shares to hit a multi-year low today.

The Newcrest Mining Ltd (ASX: NCM) share price dropped to multi-year low of $19.06 during early afternoon trade.

While slightly recovered, its shares are currently down 3.14% to $19.14.

On the other hand, the Evolution Mining Ltd (ASX: EVN) share price also hit a multi-year low of $2.31 during midday.

At the time of writing, its shares are down 4.90% to $2.33 apiece.

What’s happened to both of these gold mining shares?

While no news has come out of either company today, it’s apparent that a broader decline on the ASX is attributing to the fall.

The S&P/ASX 200 Resources (ASX: XJR) index is one of the worst performers on Monday, down 1.53% to 5,005.9 points.

A general weakness in commodity prices is dragging down gold and mining shares amid investors’ uncertainty on the economic outlook.

United States inflation numbers for June are set to be released this Wednesday along with the domestic jobs data on Thursday.

Undoubtedly, the market will be closely looking at the readings that come out of both reports.

If these numbers are high like the previous month, it could lead the Federal Reserve to ramp up interest rates again.

In addition, investor risk appetite for gold has receded over the past week which has piled on selling pressure.

The spot price of gold has been on a downwards path to trade below the psychological US$1,800 barrier. Currently, the yellow metal is fetching for US$1,740 per ounce.

Traditionally, in times of uncertainty and volatility, gold is considered a safe haven for investors to park their money.

However, with higher interest rates from central banks to cool inflation, investors tend to shift their assets into government bonds.

Looking at the latest figures, the Australian government bond yields range from 2.58% to 3.69% depending on the length of time.

Foolish takeaway

Despite the recent falls of both company shares, a small exposure to gold can be beneficial for any investor portfolio.

Even in the current economic climate, holding established gold mining companies with a long-term horizon can reap strong rewards.

The post 2 ASX 200 gold mining shares getting plastered with new multi-year lows appeared first on The Motley Fool Australia.

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More reading

• Is this a good time to go digging for ASX 200 mining shares for FY23?
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• Is now the time to be buying beaten down ASX 200 mining shares?
• Here’s how the Newcrest Mining share price glamoured in FY22

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The AMP Ltd (ASX: AMP) share price had another rough trot in FY22 and finished around 13% in the red.

At the time of writing, shares in the financial services giant are trading at $1.01each, in line with their June 2022 levels.

In broader market moves, the S&P/ASX 200 Financials index (ASX: XFJ) has slipped 10% into the red this year to date and 8% in the past 12 months.

Why did AMP slide in FY22?

It seems the big falls in the AMP share price were underscored by key macroeconomic events.

In particular, the onset of global central bank policy tightening regimes saw investors begin to price in a new set of risks to the financial sector.

The first round of interest rate hikes came from the US with the Federal Reserve opting to lift its base rate by 0.25% in March.

The Reserve Bank of Australia followed in May, also lifting rates by 0.25%.

After speculation, June saw the US Fed and the Reserve Bank of Australia (RBA) raise interest rates by 0.75% and 0.5% respectively.

The effect of the rate hikes was felt downstream immediately in the AMP share price.

It shifted south in two major drops, one on 5 May and the other on 6 June, both days when the increases were announced, as seen below via the US federal funds rate (red) and the cash rate (blue).

After suffering heavy losses in November-December 2021, following the planned demerger of AMP Limited and the new PrivateMarketsCo, it caught buyers at the January lows.

From there, the AMP share price sailed to a 52-week high of $1.21 on 5 May, before the Fed played its hand, as described above.

In the last 12 months, the AMP share price has slipped more than 8% into the red and trades well off its pre-pandemic highs.

The post Why did the AMP share price fall 13% in FY22? appeared first on The Motley Fool Australia.

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More reading

• What dragged the AMP share price down 13% in June?
• ASX bank shares look out, AMP has new tech under the hood
• Down 10% in a month, here’s the latest for the AMP share price
• Will Australia plunge into a recession?
• Guess how much insiders have been spending on AMP shares?

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price is not delivering the goods on Monday.

In afternoon trade, the pizza chain operator’s shares are down 5% to $71.95.

Why is the Domino’s share price falling?

Investors have been selling down the Domino’s share price on Monday after the company was the subject of a bearish broker note out of Goldman Sachs.

According to the note, the broker has downgraded the pizza chain operator’s shares to a sell rating and cut the price target on them by 34% to $59.20.

This implies potential downside of almost 18% based on the current Domino’s share price.

What did the broker say?

The broker made the move on the belief that the company will fall short of consensus earnings estimates. Goldman explained:

We believe that consensus remains too high, and we see further downside, specifically from lower earnings in Japan and Europe due to lower store growth and not being able to fully pass through cost-inflation.

We believe this high inflationary environment will impact DMP in two ways. Firstly, it will push out the franchisee payback period, especially for split stores, where its store economics, were already fragile. […] Secondly, for EBITDA margin, we expect that Japan will see the highest erosion, back to pre-COVID levels given sales/store dilution due to normalization of orders post COVID and high cost inflation that may not be fully passed on.

In light of this, Goldman is forecasting Domino’s to deliver earnings growth well short of consensus estimates.

We now forecast a DMP sales CAGR and NPAT CAGR from FY22-24e to be 9.5% and 5.4% respectively and our EPS forecasts are 10%/19%/27% below FactSet consensus for FY22-24e inclusive due to both our lower sales and margins expectations.

The post Domino’s share price drops 5% on bearish broker note appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: EML crashes amid CEO exit, Costa and Domino’s sink on broker downgrades
• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to buy next week
• Here are the top 10 ASX shares today
• Why Domino’s, EML, Talga, and Woolworths shares are pushing higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Macquarie Group Ltd (ASX: MQG) share price has had a rough slog in 2022. It’s plunged more than 19% year to date.

Does that mean the S&P/ASX 200 Index (ASX: XJO) is now a bargain buy? Read on to find out what brokers are tipping for the stock.

At the time of writing, the Macquarie share price is $168.94, 1.03% lower than its previous close.

For comparison, the ASX 200 is currently down 0.93% while the S&P/ASX 200 Financials Index (ASX: XFJ) has slumped 0.62%.

Macquarie share price slumps 19% this year

Macquarie has had a disappointing run on the market in 2022 so far.

Macquarie’s worst day on the market so far this year came on the back of the company’s full year earnings.

It posted a 56% jump in profits and a 36% increase in operating income. However, that wasn’t enough to sate the market. The Macquarie share price tumbled close to 8% on the bank’s results.

The stock has also likely been weighed down by rising inflation, three consecutive interest rate hikes, and, potentially, a $400 million capital raise.

Brokers bullish on Macquarie

Many brokers are expecting big things from the Macquarie share price, tipping the stock as a buy and predicting a notable upside.

Morgans is one such broker. It slapped the banking giant’s stock with a $215 price target and an add rating, my Fool colleague James reported earlier today.

On top of that, it’s tipping the bank to pay out $7.05 per share in dividends this financial year and $7.47 per share next financial year.

JP Morgans and Wilsons also liked the look of the bank last month, my colleague Zach reported.

The former assigned the bank’s shares a $218 price target and an overweight rating – representing a 29% upside on Macquarie’s current share price.

The post Down 19% in 2022. Is the Macquarie share price trading in the bargain bin? appeared first on The Motley Fool Australia.

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More reading

• Here are the 5 best ASX 200 bank shares of FY22
• Broker names 2 ASX 200 dividend shares to buy in July
• 4 ‘quality’ ASX shares to buy in scary times: expert
• I’m sticking by this ‘quality’ ASX share that’s fallen 20%: expert
• Why Macquarie shares could be a ‘quality cyclical at a discounted price’: expert

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s been a difficult day so far this Monday for the S&P/ASX 200 Index (ASX: XJO). At the time of writing, the ASX 200 has kicked off the trading week with a loss of 0.91% so far. But it’s been an even worse day for one of the ASX 200’s newest entrants – Lake Resources N.L. (ASX: LKE).

Lake Resources shares are having a rather wild day so far. This ASX 200 lithium stock is currently down by a nasty 3.47% at 69.5 cents a share. This move comes after the lithium company closed at 72 cents a share last week and initially opened at that level this morning. But soon after, Lake Resources dropped below this threshold and fell as low as 68 cents a share.

Lake Resources has also risen to the top of the ASX 200’s share trading volume charts as the day has gone on. According to investing.com, more than 14.55 million Lake shares have traded on the share market so far this Monday. Out of the entire ASX 200 index, only EML Payments Ltd (ASX: EML) has had more shares find a new home so far.

But there is another factor to consider with Lake Resources shares today. As my Fool colleague James covered this morning, Lake Resources has now entered the list of the top ten most shorted ASX shares on the market.

Why are investors shorting Lake Resources shares?

Short selling refers to the practice of borrowing shares and selling them, with the intention of buying them back at a later date. It’s a way that investors can profit if a share price falls during this period.

If an ASX share is amongst the top most-shorted shares list, it means that there are a large number of professional investors betting that the company will fall in value in the future.

So this might help explain Lake Resources’ high trading volume today.

So why might investors be selecting Lake Resources to short sell right now? Well, it could be a consequence of the messy saga we saw with this company last month.

As we covered at the time, Lake Resources announced the shock resignation of its CEO Steve Promnitz on 20 June. All signs pointed to a departure that was not exactly amicable. The most obvious of these was the firesale of all 10.2 million of Promnitz’s Lake Resources shares the very next day.

There has also been talk of overoptimistic demand projections for lithium over the next few years. Combine that with a Lake Resources share price that had soared more than 150% between February and April this year, and we have a list of credible reasons why investors might want to short sell Lake Resources shares right now.

So all in all, not a fantastic start to the trading week for the Lake Resources share price this week. Let’s see what comes next for this ASX 200 lithium stock.

The post Why are Lake Resources shares becoming a short seller target? appeared first on The Motley Fool Australia.

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More reading

• Here are the 5 best ASX 200 bank shares of FY22
• ASX 200 midday update: EML crashes amid CEO exit, Costa and Domino’s sink on broker downgrades
• Is this a good time to go digging for ASX 200 mining shares for FY23?
• How did ASX 200 travel shares go in FY22?
• These are the 10 most shorted ASX shares

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended EML Payments. The Motley Fool Australia has positions in and has recommended EML Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Zip Co Ltd (ASX: ZIP) share price is heading south during mid-afternoon trade on Monday.

At the time of writing, the buy now, pay later (BNPL) company’s shares are down 5.66% to 50 cents a share.

For context, the S&P/ASX 200 Financials (ASX: XFJ) sector is 0.59% lower to 5,878.7 points amid a broader sell-off today.

What dragging Zip shares down today?

While the broader market may be contributing to the Zip share price fall today, investors are digesting the latest news surrounding the company.

According to Business News Australia, Zip is shutting down its money management app Pocketbook.

This comes after the embattled company struggles with higher-than-expected bad debts along with unfavourable macroenvironmental conditions, including rising interest rates.

Acquired by Zip in 2016 for $7.5 million, Pocketbook is Australia’s largest personal finance management app with more than 800,000 users.

The software analyses and tracks spending by category and value, providing users with budgeting tools and offering better control of finances.

Zip chief product officer Travis Tyler commented:

Zip’s operating environment has changed significantly in the last few months and as a result we have adapted our strategy accordingly in order to accelerate our path to global profitability.

With this in mind, Zip has decided to close the Pocketbook app in order to reprioritise resources and focus on delivering sustainable profitability in our core ANZ market.

The closing of Pocketbook will come into effect on 5 August.

Despite an 89% increase in revenue, Zip posted a staggering loss of $172.7 million for the first half of FY22.

With total cash on hand down 19% to $266.8 million for the period, Zip is making changes to preserve its cash balance.

A number of experts are predicting the BNPL sector to fall further as tighter regulation looms in mid-2022.

As reported by The Guardian, Australian financial services minister Stephen Jones said that BNPL products would be treated the same as credit products.

Zip share price summary

Over the past 12 months, the Zip share price has plummeted almost 94%, with year-to-date performance down 88%.

It seems a long time ago that the company’s shares rocketed to an all-time high of $14.53 in February 2021.

Based on today’s price, Zip has a market capitalisation of approximately $345 million.

The post Own Zip shares? BNPL player shuts down finance app to focus on profitability appeared first on The Motley Fool Australia.

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More reading

• Down 6%, why Monday is not a fun day for the Zip share price
• Why did some ASX BNPL shares plummet more than 90% in FY22?
• Guess which 2 ASX shares were the best and worst All Ordinaries performers of FY22
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why Block, Bubs, Infomedia, and Zip shares are dropping

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Crypto mining may appear to take place in the virtual realm.

But the reality is that the blockchains behind these virtual tokens are maintained by numerous powerful, energy hungry computers.

Take Bitcoin (CRYPTO: BTC), the world’s original crypto, for example.

Bitcoin relies on a proof-of-work (PoW) protocol to verify transactions, which requires a series of miners along the blockchain working in tandem. While the system works, in today’s carbon weary world, the amount of electricity used is mind boggling.

In fact, according to a study by the University of Cambridge, in 2020 Bitcoin used as much energy as all of the Netherlands’ 17 million people. The university also revealed that Bitcoin used almost as much energy as all of the global gold mining activity that year.

But just like corporations are working to green their images and minimise their environmental footprints, so too are a number of pioneering cryptos.

One of the best means for cryptos to go green is to shift from the proof-of-work protocol that Bitcoin still relies on, to what’s known as proof-of-stake (PoS). This sees miners staking some of their own holdings to participate in verification processes. Requiring a lot fewer computers, proof-of-stake has the potential to significantly reduce associated emissions along with reducing overall costs and increasing speeds.

So, which five cryptos are leading the green transition charge?

For insight into that answer, we turn to Coinspot market analyst, Lee Daniels.

World’s number eight crypto greening its credentials

First up, Daniels points to Cardano (CRYPTO: ADA). Currently trading for 45.4 US cents, Cardano has a market cap of US$15.4 billion, making it the eighth biggest token in virtual circulation.

“The digital currency is named after Ada Lovelace, a 19th century mathematician who is recognised as the world’s first computer programmer,” Daniels said.

“Cardano’s PoS blockchain platform has been built with the purpose of igniting the ‘positive change the world needs’,” he added. “Users can utilise ADA as a secure exchange of value and every transaction is recorded under the Cardano blockchain. Cardano works like Ethereum (CRYPTO: ETH), enabling smart contracts and decentralised applications.”

Cardano hit all time highs of US$3.10 on 2 September last year.

ALGO and EOS

Two other cryptos that are spruiking their green credentials are Algorand (CRYPTO: ALGO), and EOS (CRYPTO: EOS).

Algorand, a decentralised blockchain-based network, supports a range of applications.

Currently worth 30.4 US cents, it has a market cap of US$2.1 billion, placing it at number 28 in terms of size.

As for its sustainable nature, Daniels explains:

Algorand was the world’s first pure PoS blockchain. Its network was designed to minimally impact the environment, allowing for faster and cheaper transaction times. Committed to being the greenest blockchain, Algorand is built on an open-source, carbon-negative network and sets the industry standard in sustainability to combat CO2 emissions.

Algorand hit record highs of US$3.28 on 21 June 2019.

As for EOS, it’s “the native cryptocurrency of EOSIO, an open source platform for blockchain innovation and performance”.

EOS is currently trading for 99.2 US cents, with a total market value of just under US$1 billion.

It’s similar to Ethereum, Daniels said, in that it’s a smart platform for the development of decentralised applications:

EOSIO uses a unique consensus model called Delegated Proof-of-Stake model (DPoS), which allows it to process millions of transactions per second. It also features a voting and delegation mechanism that makes the process more democratic, allowing users to spend their coins to vote for various delegates.

EOS hit record highs of US$22.89 on 29 April 2018.

Two other leading cryptos with an eye on the environment

Next up we have IOTA (CRYPTO: MIATA).

Trading for 28.9 US cents, IOTA is the 54^th biggest crypto, with a market cap of US$804 million.

IOTA, Daniels said, “is designed for the ‘Internet-of-Things’(IoT), handling payments and other transactions between physical devices that are connected to the internet”.

As for its green credentials, he explained:

IOTA exists to overcome the cost and scalability limitations of blockchain by its proprietary technology called the ‘Tangle’. The Tangle’s data structure consists of a group of data nodes that flows unidirectionally, unlike that of blockchain structure. IOTA is designed to accommodate devices such as sensors that operate in a low-energy environment.

IOTA hit all time highs of US$5.69 on 19 December 2017.

Which brings us to the fifth crypto with a green tinge, Stellar (CRYPTO: XLM).

Stellar is trading for 10.6 US cents and has a current market cap of US$2.7 billion, number 24 on the top-100 list in terms of size.

So what is Stellar and why is it considered a green crypto?

According to Daniels:

Stellar is an open network for storing and saving money. Users can create, send and trade digital representations of all forms of money like USD, peso or Bitcoin.

The software runs across a decentralised, open network and handles millions of transactions each day… Stellar features a unique algorithm called the Stellar Consensus Protocol (SCP), which strives to be highly configurable, faster, and more highly energy efficient than Bitcoin’s PoW method.

Stellar hit all-time highs of 93.8 US cents on 4 January 2018.

The post 5 cryptos boosting their green credentials in 2022 appeared first on The Motley Fool Australia.

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More reading

• Own Zip shares? BNPL player shuts down finance app to focus on profitability
• Here are the 5 best ASX 200 bank shares of FY22
• Novonix share price sinks 8% following ‘gun shy’ broker note
• What Coinbase is building during the crypto winter
• ASX 200 mining shares glide lower as expert reduces commodity targets

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia has positions in and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The financial year that has just passed us by – FY22 – was something of a mixed bag for ASX shares and the S&P/ASX 200 Index (ASX: XJO). Between 1 July 2021 and 30 June 2022, the ASX 200 went backwards by 10.19%. But how did ASX 200 bank shares do?

ASX banks, of course, form a major constituency of the ASX 200. Indeed, the big four ASX banks are currently the second, fourth, fifth and sixth largest ASX 200 shares on the share market by market capitalisation. Together, these four companies make up almost 20% of the entire ASX 200’s weighting as it currently stands.

So if the ASX 200 had such a dreary year, it immediately tells us that it’s likely that the ASX banking sector also had a tough FY22. But time to put some numbers to these predictions and see if they are sound.

Here are the 5 best ASX bank shares of FY22

So our fifth-best performing ASX bank share last financial year was none other than Australia and New Zealand Banking Group Ltd (ASX: ANZ). ANZ shares started FY22 at $28.15 but ended up finishing the financial year at just $22.03.

That means ANZ shares gave investors a loss of 21.74% for FY22. Not even ANZ’s trailing dividend yield of 6.35 % could make up for a loss like that.

Bendigo and Adelaide Bank Ltd (ASX: BEN) may not be a member of the big four. But it was nonetheless, the fourth-best performing ASX bank share last financial year. Bendigo Bank started out at $10.49 a share but finished up last month at $9.07. That’s a loss for FY22 of 13.54%.

Next up we have Commonwealth Bank of Australia (ASX: CBA), the ASX 200’s largest bank share by market cap. CBA shares indeed had a rough FY22, beginning at $99.87 but finishing up at $90.38. That’s a loss of 9.5%.

Our ASX banking silver medallist is another big four bank in National Australia Bank Ltd (ASX: NAB). NAB was the only big four bank to record a positive share price movement over FY22. NAB shares started July 2021 at $26.22 each but ended up at $27.39 last month. That’s a gain of 4.46% for FY22.

The ASX 200’s top bank of FY22…

And our best-performing ASX bank share for FY22 is… none other than Macquarie Group Ltd (ASX: MQG). Macquarie is arguably not a bank in the same way the other companies on this list are. Its banking division makes up a small portion of its overall earnings base.

But we can’t ignore that Macquarie shares beat out every other ASX banking share over FY22. Macquarie rose from $156.43 to $164.31 over the financial year just gone, a gain of 5.04%.

So that’s our five best ASX 200 bank shares of FY22 revealed. It will be interesting to see if these same names top the best banks of FY23. But we’ll have to wait and see.

The post Here are the 5 best ASX 200 bank shares of FY22 appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: EML crashes amid CEO exit, Costa and Domino’s sink on broker downgrades
• How does the CBA dividend stack up against its ASX 200 peers?
• Is this a good time to go digging for ASX 200 mining shares for FY23?
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Motley Fool contributor Sebastian Bowen has positions in National Australia Bank Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Bendigo and Adelaide Bank Limited. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Novonix Ltd (ASX: NVX) share price has started the week deep in the red.

In afternoon trade, the battery technology company’s shares are down 8% to $2.26.

This means the Novonix share price is now down almost 80% since the start of the year.

Why is the Novonix share price sinking?

Investors have been selling down the company’s shares on Monday in response to a cautious broker note out of Morgans.

For several months the broker has had a hold rating and $4.88 price target on the Novonix’s shares. While only a hold rating, this price target no doubt sparked hopes that there was significant upside ahead for its shares over the next 12 months.

However, those hopes have been extinguished today after Morgans took an axe to its price target.

According to the note, the broker has retained its hold rating but cut its price target by 39% to $2.88.

What did Morgans say?

Morgans notes that the risk off sentiment is now reflected in the Novonix share price but it is still feeling “gun shy.”

It explained:

We have deferred our expectations for revenue as commissioning continues on the Riverside anode facility. NVX has not provided further updates on the progress of a firm offtake with Samsung and we suspect it will take longer than hoped.

The market is pricing in risk much more aggressively and NVX has not yet proven the viability of its anode business with blue chip clients at scale.

We have therefore reduced our target price to $2.98 (-39%) with a higher assumed cost of equity and a later assumed ramp up of production.

All in all, it appears as though the broker doesn’t feel the risk reward on offer with Novonix’s shares is compelling enough at this point despite its sizeable decline in 2022.

The post Novonix share price sinks 8% amid ‘gun shy’ broker appeared first on The Motley Fool Australia.

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More reading

• These 3 ASX 200 lithium stocks are exploding on Friday
• Why was FY22 a rollercoaster period for the Novonix share price?
• Why did the Novonix share price slide nearly 36% in June?
• These were the worst performing ASX 200 shares in June
• Novonix share price down 6% on Tuesday, what’s happening?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Shares of cryptocurrency stock Coinbase Global (NASDAQ: COIN) have dropped over 85% from their peak in late 2021 as the crypto market has imploded. Trading is down, prices are down, and there’s concern that margins will be under pressure all year.

As terrible as the operating conditions are today, Coinbase continues to build for the future. And if it can execute on plans to become more than just an exchange, this could be one of the biggest winners in the future of crypto and Web3.

The exchange problem

Coinbase has made its money by being a popular crypto exchange, particularly in the U.S. But there are other exchanges with lower fees, and there will naturally be pricing pressure for Coinbase to lower transaction costs for all users. Combine that with the decline in transaction volume overall and you have a recipe for declining revenue and margins in 2022. 

In the first quarter of 2022, retail trading volume plummeted from $177 billion to $74 billion sequentially. A vast majority of revenue is generated from retail traders, so this was the biggest reason for the decline in revenue and earnings.

There’s no easy fix to the exchange problem. Margins will continue to be squeezed and retail traders may not be coming back anytime soon. So Coinbase needs to look elsewhere for revenue.

Business is where the money is

Coinbase may be known for being a popular exchange for traders, but the future of its business may be business services. Subscription and Services revenue jumped 169% in the first quarter of 2022 versus a year ago, while transaction revenue dropped 34%.

There are a number of opportunities like staking services, which take a 25% commission for helping users stake cryptocurrencies. Custodial fees were also $31.7 million, and I think that could grow as the company offers security products to users. Coinbase is looking to combine its app and wallet into an easier to use platform, which could make onboarding users easier.

COIN Revenue (Quarterly) data by YCharts.

Cloud services could be a big part of the company’s future as well as developers look to build faster in Web3. There’s no point in building wallet integrations, commerce tools, or trading capabilities when they’re available through Coinbase Cloud. This could be a cloud giant for Web3 companies.

For example, Coinbase is one of the providers of Shopify’s crypto payments platform, and the same tools are available to anyone. If you think commerce is going to be disrupted by “crypto rails” — or cryptocurrency being the path the funds move from a customer to a merchant — rather than credit or debit cards, Coinbase could be a huge player.

Crypto and NFTs will someday be invisible

If I had to sum up the case for Coinbase long term, it’s that no company could make cryptocurrencies and NFTs invisible better than Coinbase. As someone told me at the world’s largest non-fungible token conference NFT.NYC, “this should be a non-event for most people.”

What does that mean? It means that users shouldn’t have to worry about remembering security phrases that could compromise their accounts or wallet integrations or signing nefarious transactions in Web3. They should be able to feel comfortable using Web3 tools, and the technical details should fade into the background.

I think this is what we’re seeing with Coinbase integrating more of its app and wallet products together, introducing an NFT marketplace, and having “Pay with Coinbase” available to merchants. When concert tickets move to the blockchain, it’ll be a nonevent because the tickets will simply go to your Coinbase App. Or when a coffee shop sends you a loyalty NFT, it may sit in the background of your Coinbase App, invisible to you because it lives on the blockchain but can be hidden from sight.

Focus on the next billion users

Coinbase is building the tools to onboard the next billion people to crypto, NFTs, and Web3 more broadly. That’s what the company is doing in this bear market, and if it succeeds, the company could come out of this stronger than ever. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post What Coinbase is building during the crypto winter appeared first on The Motley Fool Australia.

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More reading

• Here’s why Coinbase stock fell 81% in the first half of 2022
• Coinbase Plunges on Crypto and Celsius Fears, but This Is the Real Threat

Travis Hoium has positions in Coinbase Global, Inc. and Shopify. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Coinbase Global, Inc. and Shopify. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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