4 Coinbase Analysts Have Mixed Feelings On Q2 Earnings: Are There Glimmers Of Hope?

Cryptocurrency platform Coinbase Global Inc COIN reported second-quarter financial results after market close Tuesday. Here’s what analysts are saying about the company, the crypto bear market and what’s ahead.

The Coinbase Analysts: Bank of America analyst Jason Kupferberg had a Buy rating and price target of $92.

JMP Securities analyst Devin Ryan had a Market Outperform rating and lowered the price target from $205 to $195.

Mizuho Securities analyst Dan Dolev had a Neutral rating and a price target of $42.

Needham analyst John Todaro had a Buy rating and price target of $89.

Related LInk: Coinbase Q2 Earnings Highlights: Revenue And EPS Miss, Company Remains Optimistic 

The Analyst Takeaways: Bank of America's Kupferberg called the quarterly report from Coinbase a “mixed bag.” The company reported revenue below analysts’ estimates but showed optimism for the rest of the year.

The analyst highlighted the company’s focus on costs and also its risk management with comments that it had no exposure to Celsius, Three Arrows Capital or Luna issues.

“COIN also has a history of no credit losses from financing activities, holds customers assets 1:1, and any lending activity of customer crypto is at the discretion of the customer,” Kupferberg said. “We believe these stringent risk management practices will be a positive long-term differentiator for COIN.”

JMP Securities' Ryan lowered the price target but still had one of the highest targets for the cryptocurrency platform. The analyst said the long-term thesis on Coinbase remains intact.

“We characterize 2Q22 as an incredibly tough quarter, but one we were generally braced for given the challenging macro dynamics,” Ryan said.

The analyst also highlighted monthly transacting users being down only 2% on a quarter-over-quarter basis despite the macro issues.

“We continue to have the conviction that Coinbase remains incredibly well positioned to benefit as the pendulum moves back into the middle, which we believe it inevitably will.”

Mizuho Securities' Dolev pointed to weak volumes in the second quarter and overhanging issues that lingered for Coinbase.

“User and ARPU guide downs should weigh on sentiment as well,” Dolev said.

Needham's Todaro highlighted optimism in the subscription and services business related to the Ethereum ETH/USD merge coming.

“We view Coinbase as an attractive way to play the growing crypto asset universe, which includes overlap in the high growth areas of stablecoins, decentralized finance, non-fungible tokens, borrow/lend application and yield farming,” Todaro said.

The analyst said the company can grow its trading revenue and its “crytpo ecosystem.” Todaro highlights the ease of use of the company’s platform and its growing momentum with institutions.

COIN Price Action: Coinbase shares are up 5.01% to $92.03 on Wednesday at publication.

Photo: Nadezda Murmakova via Shutterstock