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Market Volatility Continues to Haunt Coinbase

Cryptocurrency exchange platform Coinbase Global, Inc. (NASDAQ: COIN) has reported weak results for the first quarter of 2022. Net loss came in at $1.98 per share, compared with the year-ago profit of $3.05 per share and the Street’s profit estimate of $0.05 per share.

Total revenues stood at $1.17 billion, lower than analysts’ expectations of $1.5 billion. The company had reported revenues of $1.8 billion in the same quarter last year.

Transaction revenue amounted to $1 billion, down from $1.5 billion a year ago. However, Subscription and Services revenue increased to $151.9 million from $56.4 million in the year-ago quarter.

Adjusted EBITDA totaled $20 million, compared with $1.1 billion last year. Monthly Transacting Users (MTU) rose to 9.2 million from 6.1 million in the first quarter of 2021.

Further, Total Trading Volume was $309 billion, down from $335 billion last year.

In its letter to shareholders, Coinbase said, “You can expect volatility in our financials, given the price cycles of the cryptocurrency industry. This doesn’t faze us, because we’ve always taken a long-term perspective on crypto adoption. We may earn a profit when revenues are high, and we may lose money when revenues are low, but our goal is to roughly operate the company at break-even, smoothed out over time, for the time being.”

Outlook

For the second quarter, the company expects MTUs, Total Trading Volume and Subscription and Services revenue to be lower than the first quarter.

Additionally, it expects to report an adjusted EBITDA loss of around $500 million for full-year 2022.

Price Target

Based on 14 Buys, two Holds and two Sells, the stock has a Moderate Buy consensus rating. COIN’s average price target of $241.59 implies 231% upside potential from current levels. Shares have lost almost 76% over the past year.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (NYSE: SEMR), the world’s biggest website usage monitoring service, offers insight into Coinbase’s first-quarter performance.

According to the tool, Coinbase’s website traffic registered a 14.1% decline in global visits in March, compared to February. Further, the footfall on the company’s website has decreased 9.2% sequentially in the first quarter.

The downtrend in the company’s website visits supports the year-over-year fall in its revenue and earnings. This shows that TipRanks’ website traffic tool helps in making reliable predictions about a company’s performance.

Conclusion

Following the announcement of the results on Tuesday, COIN stock lost 12.6% to close at $72.99. The fall continued and the company’s shares went down another 19% in the pre-market session on Wednesday.

The market volatility that began late last year continues to hurt the cryptocurrency industry. Further, it remains to be seen how Coinbase will deal with this issue and turn profitable.

Learn more about the Website Traffic tool in this video by Youtube sensation Tom Nash. 

Read full Disclaimer & Disclosure

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