The share price for US-based cryptocurrency exchange Coinbase (COIN) has had a slight rebound in recent weeks, ahead after hitting fresh lows following the company’s announcment of its quarterly earnings report in May. Coinbase reported a net loss after turning a profit last year, as users turned away from collapsing cryptocurrency markets and the platform’s trading volume fell.
The COIN stock price has plunged by 79.6% year to date (YTD), as of June 22, and 85% since Coinbase went public during the crypto market rally in April 2021.
What’s next for the stock? Can it claw back value? Should you buy Coinbase shares in anticipation of a future cryptocurrency market rally, or short the stock in expectation of further losses? In this article we look at the company’s performance and the latest Coinbase stock predictions from analysts.
Coinbase stock follows crypto markets lower
Coinbase went public on the Nasdaq Stock Exchange in April last year, and initially traded above the early indicated price range at around $100, closing at $342 in the first session.
The COIN stock price dropped to $224.35 a share in late May, coinciding with a cryptocurrency markets selling off, and then continued to follow the price trend, climbing to its peak of $368.90 in November when bitcoin (BTC) climbed to its all-time high.
The stock started 2022 at the $251 level, and continued to trend lower, closing at $103.74 on 6 May. The price then plummeted to $53.72 on 11 May, the day after the company announced weaker than expected first-quarter earnings.
Coinbase’s first quarter net revenue totalled $1.17bn, including $1bn in transaction revenue, down from total net revenue of $1.58bn in the first quarter of 2021. Subscription and services revenue was $151.9m, which represented 13% of total net revenue. That was up from $56.4m a year earlier.
Coinbase had 9.2 million monthly transacting users in the first quarter, up from 6.1 million in the first quarter of 2021, but down from 11.4m in the fourth quarter.
Lower transaction revenue and the company’s investment in the business pulled down its adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) to $20m. The company reported a net loss of $430m, compared with a net profit of $771m.
Wall Street had expected net revenue of $1.46bn and adjusted EBITDA of $448m, according to a client note from Bank of America, which had forecast revenue of $1.37bn and EBITDA of $343m.
“To that end, we have made good progress year-to-date, highlighted by the beta launch of Coinbase NFT, growth in adoption of Coinbase Wallet, expansion of our staking offering through the addition of Cardano, and hiring over 1,200 full-time employees to help us build the future of crypto.”
Coinbase noted that the total cryptocurrency market capitalisation has “swung significantly” so far this year, dropping by nearly 30% in January, rebounding somewhat in March, then falling in April before its plunge in mid-May following the collapse of the Terra UST and LUNA coins. Crypto prices plunged again in mid-June, bringing the Coinbase share price back down towards $50 from $78.10 at the end of May.
What is the outlook for the Coinbase share price after the heavy decline? Read on for the latest Coinbase stock predictions from analysts.
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Coinbase stock forecast: Is now the time to buy or sell the stock?
The average price target from 21 analysts who have issued a 12-month COIN stock forecast was $191.17, according to data compiled by MarketBeat, as of 21 June, with estimates ranging widely from a low of $45 to a high of $455. There were 16 ‘buy’, five ‘hold’ and no ‘sell’ ratings.
“We continue to think COIN remains well positioned to roll out new products that will generate top line growth and diversify revenues. Maintain Buy,” Bank of America analyst Jason Kupferberg wrote in Coinbase share price forecast report on 10 May.
“COIN’s disappointing 1Q results and 2Q guide should continue to haunt the stock. Most notably: crypto market cap declined ‘sharply’ since April, 2Q guide contemplates lower MTUs and [financial year] FY guide calls for [average revenue per user] ARPU nearing 2019 lows. Adjusted EBITDA barely in positive territory is difficult to digest,” analysts at Mizuho Securities wrote in a COIN stock forecast note on 10 May.
“Is higher retail yield a silver lining in 1Q? Not in our view, given that it is largely mix-driven and may reverse again. Despite weak trends, the FY MTU guide is unchanged, requiring an even bigger ramp in 2H than originally anticipated. We are not holding our breath. Neutral.”
On 15 June, four investment firms lowered their COIN price targets after a sharp drop in cryptocurrency prices, with bitcoin plummeting to the $20,000 level. Goldman Sachs cut its Coinbase stock forecast from $80 to $70 with a ‘neutral’ rating.
Needham and Company cut its price forecast from $173 to $89 with a ‘buy’ rating, Piper Sandler cut its target from $180 to $120 with an ‘overweight’ rating. Mizuho cut its target from $60 to $45.. The previous day, J.P. Morgan downgraded its rating from ‘overweight’ to ‘neutral’, cutting its Coinbase stock forecast from $171 to $68.
Algorithm-based forecasting website Wallet Investor was bearish in its Coinbase stock forecast for 2022 at the time of writing (21 June), predicting that the share price would drop to $0.00003056 in December, raising questions about the stock’s future. By contrast, Panda Forecast had a Coinbase stock forecast for 2025 of $70.60 by the end of the year.
If you are considering investing in the COIN stock, we recommend that you always do your own research. Look at the latest market trends, news, technical and fundamental analysis, and expert opinion before making any investment decision. Keep in mind that each analyst’s Coinbase stock forecast is different and can be wrong. Past performance is no guarantee of future returns. And never invest money that you cannot afford to lose.
Is Coinbase a good stock to buy?
The Coinbase stock price is closely tied to cryptocurrency markets, which are high risk, highly volatile assets. Whether Coinbase is a good fit for your portfolio will depend on your risk tolerance and investing strategy.
Will Coinbase stock go up?
As of 21 June, some analysts mentioned in the article predicted that the Coinbase stock price could rise, while others expected it to fall. That difference in views emphasises the importance of doing your own research to take an informed view of the share price.
Should I invest in Coinbase stock?
Whether you should invest in Coinbase stock is a decision that only you can make based on your own personal circumstances and investing goals. Past performance is no guarantee of future returns. And never invest money that you cannot afford to lose.