Shares of Coinbase (COIN) plunged 16% at the time of writing in their biggest intraday drop since April, after the crypto exchange reported weaker-than-expected revenue for the second quarter. The decline came as trading volumes fell sharply due to lower volatility in crypto markets. More specifically, total trading volume dropped 40% compared to the previous quarter as investors pulled back from non-Bitcoin assets, even as Bitcoin prices rose 6%.
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“We saw shifting macro conditions, including trade policy considerations and recession concerns, impact risk assets broadly,” CFO Alesia Haas said on the earnings call. “Crypto assets were no exception.” As a result, the company posted $1.5 billion in revenue for the quarter, up 3.3% year over year but below Wall Street’s forecast of $1.59 billion. Despite the disappointing quarter, some analysts and executives told investors to focus on Coinbase’s longer-term strategy.
Indeed, five-star Bernstein analyst Gautam Chhugani reiterated an Outperform rating and a $510 price target. Interestingly, he called it “the quarter that doesn’t matter” and pointed to the firm’s potential in crypto derivatives and its “everything exchange” vision as reasons to be bullish. Unsurprisingly, CEO Brian Armstrong also emphasized Coinbase’s push into tokenized equities, which he described as offering global 24/7 trading, instant settlement, and perpetual futures.
Is COIN a Good Buy Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on COIN stock based on 14 Buys, 12 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average COIN price target of $388.88 per share implies 24.4% upside potential.
