Katri stated that Coinbase performed exceptionally well in the second quarter. Its revenue, adjustedEBITDBoth EBITDA margins exceeded Wall Street's general expectations. However, as cryptocurrencies fell sharply at the end of the second quarter, Coinbase's platform trading volume also declined.
This five-star analyst predicts that Coinbase's total trading volume will decline starting in the third quarter. This is understandable, as the company's trading volume increased by 1550% year-on-year in the same period last year, and its trading revenue increased by 1023% year-on-year.
However, Katri added, "The platform is encrypted."AssetsThe decline in value appears to be the result of a quarterly drop in cryptocurrency prices, rather than a decline in usage.
The company still has multiple monetization opportunities and is expected to continue to enhance its long-term profitability. In addition, charging higher fees per transaction will affect user retention and engagement, although this impact seems to be offset by the platform's "breadth of products and services".
Although cryptocurrency volatility slowed in July, regulatory uncertainty is expected to continue to cause significant fluctuations in Coinbase's stock price. Throughout the second quarter, U.S. and Chinese regulators made announcements about cryptocurrencies, sometimes with devastating consequences for Bitcoin and similar products. Katri believes that this volatility will continue.
On TipRanks, 11 analysts have given Coinbase a "buy" rating, 3 a "hold" rating, and 1 a "sell" rating. The consensus rating is "moderate buy," with an average target price of $369.25, implying a 33% upside from the current stock price.