Coinbase’s outlook is mixed ahead of second quarter revenue

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Not everything is rosy for the crypto exchange, as we plan to discuss the results of Q2 tomorrow despite Coinbase’s second quarter milestones.

Coinbase’s stock price nearly doubled during the quarter. Performance Oppenheimer analysts were attributed to the inclusion and progress of the S&P 500 on the Genius Act (progress that led to the ultimate passing earlier this month).

Coin stock was trading about $382 on Wednesday at 1:30pm ET. This has increased by 9% from a month ago.

Still, otherwise, the coin setup before the quarterly print is “adverse,” Owen Lau and Guru Sidharth of Oppenheimer wrote in a note. They estimate Coinbase’s second quarter trading volume was around $220 billion, down 44% from the previous quarter.

Morningstar analyst Michael Miller noted that, given Coinbase’s biggest revenue stream, transaction volumes are always a key data point.

But beyond that, Miller has heard commentary on the pressure of pricing (or lack of it) as competitors like Robinhood increase crypto products in a friendly regulatory environment.

“I’m also looking for data and commentary on the company’s basic transaction volume and revenue, as well as the USDC volume of the company’s platform and products,” Miller told me. “Although Coinbase is still heavily exposed to cryptocurrency trading, USDC and Base are enjoying a lot of momentum this year.”

Miller revealed in a memo Monday that he increased the coin’s “fair value estimate” from $170 to $205. Indeed, part of that was due to overall bullish sentiment, USDC’s market capitalization overturned $60 billion after the Stablecoin-focused genius became law. If you forget, Coinbase will earn interest income from the USDCs it owns on that platform.

Source: rwa.xyz

Despite the upgrades to Miller’s coins, he believes the stock is “significantly overvalued” as the market responds to the recent spike in crypto prices.

Oppenheimer’s analysts see things a little differently. They have a coin price target of $417 (the next 12-18 months).

Lau and Sidaarth finds that Coinbase’s US derivatives and international exchanges are more resilient than spot trading volume, increasing 22% and 28% quarterly, respectively. That’s the area they’re focused more after Coinbase’s Delibit acquisition.

Coinbase CEO Brian Armstrong may give us a sense of other possible acquisition goals. As far as link-ups are concerned, Coinbase revealed its partnership with JPMorgan Chase on Wednesday.