Why Silvergate Capital Stock Continued to Gain Ground on Thursday
Shares of Silvergate Capital (NYSE:IF), a company that provides cryptocurrency banking services, was gaining ground on Thursday, up 6% as of noon ET. For context, the stock fell sharply two days ago when financial results fell short of expectations. But yesterday it rebounded, a trend that continues today thanks to some upgrades from analysts.
To be clear, there were plenty of analyst upgrades in yesterday’s session. However, after the market closed yesterday, news broke that Goldman Sachs analyst Will Nance raised his rating to buy. However, it should be noted that Nance simultaneously lowered Silvergate Capital‘s price target from $190 per share to $166 per share, according to The Fly.
The stock market is higher today, as are a number of cryptocurrencies, so that’s probably helping Silvergate Capital today as well. Typically, stocks fall when analysts lower their price targets, whether they say “buy” or “sell.” But generally bullish investor sentiment today is helping Silvergate Capital shares buck the downtrend with a lower price target.
Silvergate Capital benefits from the volatility of cryptocurrencies, so it was not surprising to see a slight drop in net profit from the third quarter to the fourth quarter, reported on Tuesday. This drop is what the market reacted negatively to a few days ago. However, other business fundamentals, such as number of customers and average deposit per customer, increased sequentially. This sort of thing is more fundamental to the health of Silvergate’s business and will have a greater bearing on the stock’s long-term potential than a short-term factor like recent analyst ratings.
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