Coinbase Stock Drops on Narrowed User Guidance, Analysts Cut Price Targets

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Shares of Coinbase (NASDAQ:COIN) are down over 7% in premarket Wednesday after the company reported Q2 results and full-year forecast for monthly users.

Coinbase reported an adjusted EBITDA loss of $151 million, better than the analyst consensus of $187.2 million. Revenue came in at $808.3 million to miss on the $854.8 million.

The number of monthly transaction users came in at 9 million, up 2.3% on YoY basis, and better than the consensus of 8.4 million. Trading volumes fell 53% on YoY basis to $217 billion, lower than the consensus of $220.44 billion. Coinbase reported 103 million verified users to beat the average analyst estimate of 98.4 million.

For this quarter, Coinbase said it expects lower monthly transaction users when compared to the second quarter. As a result, the company narrowed its average monthly transacting users forecast to 7 million to 9 million from the prior 5 million to 15 million. The analyst consensus was at 8.7 million.

A JMP analyst noted slow engagement but reiterated the Market Outperform rating as the long-term thesis remains intact. The analyst cut the price target to $195 from $205.

“While the backdrop is incredibly challenging at the moment, we believe Coinbase remains better positioned than many appreciate (the partnership with BlackRock’s Aladdin business is a good reminder), and as we move through this transitory moment, we think Coinbase will come out on the other end in an even better position,” the analyst said in a client note.

A Piper Sandler analyst decreased the price target on COIN stock to $115 from $120 while staying Overweight-rated.

“For investors who shun volatility, COIN’s 2Q22 financial results clearly demonstrated the impact of declining crypto prices, which many believe is the result of a crypto cycle along with a weaker macro-economic backdrop for growth & crypto stocks,” the analyst wrote in a client note.

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