(ticker: COIN) have fallen sharply from their debut price of $381 on April 14. The stock hovered around $278 in midday trading Tuesday. The company is scheduled to report first-quarter earnings on May 13 after the close. Coinbase Global Mizuho Securities’
raised his second-quarter revenue estimates by $300 million, for instance, expecting the company to report $1.6 billion in total revenue for the quarter. Average daily trading volume hit $3.7 billion in April, he estimates, implying $330 billion in volume for the second quarter, down only slightly from the first quarter.
‘s revenues may be gaining momentum, but some analysts see scant upside in its stock as competition from rival cryptocurrency trading platforms heats up. Coinbase Global
Shares of Dreamstime
The challenge for Coinbase is to protect its commissions as other trading platforms go after the same retail market. Consequently, Coinbase might have to cut its commissions to stay competitive—and that would mean a drop in profit margins. “With over 80% of total revenue reliant on retail transaction fees, significant user overlap with The headwind for Coinbase isn’t trading volumes, the price of Bitcoin (BTC) or other cryptos, or the growing acceptance of crypto as a currency that can be used for purchases at retail. Auction house Sotheby’s, for instance, said Tuesday that it would start accepting payment for artworks in Ether (ETC) or Bitcoin through a partnership with Coinbase. The first auction will be a piece by the artist Banksy, set to be sold on May 12. Bidding starts at $3 million.
But the analyst kept a Neutral rating, saying he’s “cautious” on the medium term outlook. And he joins a few other analysts who aren’t convinced there’s much upside in the shares. Bernstein Research’s Harshita Rawat, for instance, launched on Coinbase last week with a Market Perform rating and $250 target. Keefe, Bruyette & Woods analyst
has a Hold on the stock and a $325 target. That would be a win for Coinbase, which was expected to report a steeper slowdown in trading volume from the first quarter. Dolev raised his fiscal 2021 revenue estimate to $5.6 billion, from $5.1 billion, and increased his price target on the stock to $315 from $285.
The News Highlights
- Coinbase stock can get stuck in a rut because the crypto competition is heating up
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