This Wall Street Analyst Just Upgraded Coinbase to a Buy. Here Are 4 Tailwinds Fueling the Stock.

Coinbase (NASDAQ: COIN) published its third-quarter results after the market closed on Oct. 30, and reported sales and earnings for the period that came in far ahead of the market's expectations. The cryptocurrency-platform leader also issued strong forward guidance.

Following the strong Q3 report, the stock has received a wide range of price-target increases from Wall Street analysts. In addition to raising its price target on the stock from $300 per share to $425 per share, H.C. Wainwright also made a rare move with its ranking on the company -- the investment firm raised its rating on the stock from sell to buy.

Image source: Getty Images.

Coinbase stock has been on a strong bullish streak, with the company's share price up roughly 41% year to date. As of this writing, H.C. Wainwright's new price target still implies additional upside of approximately 21%.Read on for a look at four catalysts that are powering the stock's bull run.

1. Sales and earnings beats in Q3

Coinbase reported non-GAAP (adjusted) earnings per share of $1.44 on sales of $1.87 billion in Q3. The results significantly outpaced the average Wall Street analyst targets for the period, which had called for a per-share profit of $1.17 on sales of $1.8 billion.

2. Bullish momentum for the crypto market

While crypto valuations have seen some volatility recently, the overall trend this year has been decidedly bullish. H.C. Wainwright pointed to its bullish outlook for cryptocurrency valuations in Q4 as a key reason for its ratings upgrade on the stock.

3. Favorable regulatory dynamics

Wainwright also said that it sees an improving regulatory outlook as a positive catalyst for Coinbase stock. In particular, the firm's analysts think there's a good chance that legislation establishing more clear-cut regulatory frameworks for the crypto market is likely to pass before the end of this year.

The Clarity Act was already passed by the House of Representatives in July, and H.C. Wainwright's team sees a path to the legislation being voted through by the Senate. If so, the analysts think it will be a major positive development for Coinbase stock.

4. Impressive forward guidance

While there's still some uncertainty as to what will happen with the Clarity Act, the outlook is promising on that front -- and Coinbase's growth forecast suggests the stock could keep marching higher even if the legislation doesn't wind up being signed into law this year. The company is guiding for October transaction revenue to come in at roughly $385 million. Meanwhile, subscription and services revenue for the quarter is projected to be between $710 million and $790 million. Coinbase is seeing strong growth in revenue from stablecoins, and it's also seeing strong momentum for its Coinbase One subscription service.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.