Crypto bank shares Silvergate Capital (NYSE: IF) It jumped on Wednesday, adding up to 9%. As of 1:58 PM ET, the stock was still up 6.9%.
The catalyst that propelled the crypto-friendly bank to the top was a courtesy upgrade from a Wall Street analyst, as well as a broad recovery in the cryptocurrency market.
Michael Perrito – an analyst at Keefe and Bruyette & Woods – has upgraded Silvergate Capital to outperform (buy) outperform (hold) market performance, while at the same time setting a $225 price target, according to The Fly. Its new estimate could represent a potential increase for investors of more than 74% over the next year, compared to Tuesday’s closing price of the stock.
The analyst noted the recent sell-off, noting that it led to an attractive buying opportunity. He believes that before interest rates rise, investors should increase their exposure to digital friendly banks that are eligible to take advantage of those higher rates, “while also still having fintech-type growth potential from a user and revenue perspective.”
He might be interested in something. During yesterday’s market close, Silvergate Capital’s stock is down 42% since November due to a lack of news specific to the company.
The sale appears to be overstated, with analysts estimating fourth-quarter revenue of $52.7 million, representing annual growth of more than 94%. Earnings are also expected to shine with earnings per share growth of 53%. If Silvergate manages to exceed those expectations, it will mark the fifth consecutive quarter that the company has achieved so.
Silvergate’s stock has been on a tear in the past year, nearly doubling over the course of 2021, as interest in cryptocurrencies surge, spurred by excitement over their prospects of becoming universally used and accepted.
However, there has been a massive sell-off in the digital asset market since mid-November, with many cryptocurrencies losing a third or more of their value. Silvergate Capital stocks have become closely correlated with cryptocurrencies – right or wrong – following the ebbs and flows of the broader cryptocurrency market.
However, with investors piling into cryptocurrency today, Silvergate Capital got an extra boost.
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