Katri said that Coinbase's second-quarter performance was outstanding. Its revenue, adjustedEBITDAAnd EBITDA margins both beat Wall Street consensus estimates. However, as the cryptocurrency fell sharply at the end of the second quarter, Coinbase also saw a decline in trading volume on its platform.
The five-star analyst expects Coinbase's total trading volume to decline starting in the third quarter. This is understandable, as the company's trading volume increased by 1550% year-over-year and trading revenue increased by 1023% year-over-year in the same period last year.
However, Katri added: "Encryption on the platformAssetsThe decline in value appears to be the result of a quarterly decline in cryptocurrency prices rather than a decline in usage. "
The company still has multiple monetizable opportunities that are expected to continue to strengthen 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".
While cryptocurrency volatility slowed in July, regulatory uncertainty is expected to continue to drive Coinbase stock volatility significantly. Throughout the second quarter, regulators in both the U.S. and Chinese made announcements about cryptocurrencies, sometimes with devastating consequences for Bitcoin and its ilk. Katri believes this volatility is here to stay.
On TipRanks, 11 analysts gave Coinbase a "buy" rating, 3 gave a "hold" rating, and 1 gave a "sell" rating. The consensus rating is "moderate buy", and the average target price is $369.25, which means a 33% upside from the current stock price.