Coinbase Stock Slides As Analysts Weigh In On Q2, Market Share Drop, Investment Strategy

Coinbase Global Inc COIN shares were down on Friday after the company reported downbeat second-quarter earnings.

The announcement came amid an exciting earnings season. Here are some key analyst takeaways.

COIN stock is slumping now. See real-time price here.

Analyst Kenneth Worthington maintained a Neutral rating, while reducing the price target from $404 to $342.

Coinbase's release was "somewhat of a messy print with lots of moving parts," Worthington said in a note. Revenues contracted 26% sequentially to $1.497 million, while adjusted EBITDA declined by 45% to $512 million, he added.

Adjusted EBITDA margin remains under pressure, "as Coinbase continues to invest despite a pressured top-line," the analyst stated. While industry volumes declined 26% sequentially, the company's volumes were down 40%, indicating it lost market share, he further stated.

Analyst James Yaro reaffirmed a Neutral rating, while raising the price target from $305 to $348.

Excluding one-time items, Coinbase's earnings were $1.45 per share, missing consensus of $1.52 per share, Yaro said. The results were "modestly" weaker than expected, he added.

"The company highlighted a favorable macro backdrop for crypto markets, with greater clarity on crypto regulation," the analyst wrote. The company's July crypto trading revenue of $360 million suggests a run rate higher than Street expectations for the third quarter, he further stated.

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Analyst John Todaro reiterated a Buy rating, while raising the price target from $270 to $400.

Coinbase reported a "modest" miss on both revenue and earnings, Todaro said. "We like the product expansion with tokenized assets, deeper integrations with Base, and the growing pipeline of opportunity within USDC," he added.

"We have concerns on the growth in G&A and Tech & Dev expenses in what could be the later part of a ‘crypto cycle’," the analyst wrote. He added, however, that crypto volumes had recovered strongly in July.

Analyst Joseph Vafi maintained a Buy rating and price target of $400.

In earlier earnings releases, the focus had been on Coinbase's trading volumes and "their associated economics," Vafi said. However, the focus seems to be shifting toward "a much bigger picture buoyed by a rapidly improving U.S. regulatory landscape, strong crypto spot prices and COIN’s increasingly clear position as a first choice partner for any big Tradfi/Enterprise player looking to jump on the crypto bandwagon," he wrote.

Coinbase's management has made the right investments, and the compliance now supports blockchain technology to be adopted across more traditional asset classes, the analyst further stated.

Analyst Chris Brendler reiterated a Buy rating and price target of $470.

Coinbase's total revenues of $1.50 billion missed consensus by 6%, Brendler said. He added, however, that transaction revenues were slightly higher than their estimate, with higher Consumer take rates more than offsetting lower-than-expected trading volumes.

The company indicated that volumes so far in the current quarter are tracking meaningfully higher, the analyst said. Coinbase expects its July transaction revenue to reach around $360 million, 40% above the second-quarter monthly average, he added.

COIN Price Action: Shares of Coinbase Global had declined by 14.51% to $322.94 at the time of publication on Friday.

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