Coinbase Global is facing what analysts at Oppenheimer describe as an “unfavorable” setup heading into its second-quarter earnings report, with trading volumes and revenues expected to fall short of Wall Street estimates.
The cryptocurrency exchange is projected to post a significant sequential drop in trading activity, despite its stock having more than doubled this year.
In a note issued Monday, Oppenheimer revised its trading volume estimate for the quarter ended June to $220 billion, down from its earlier forecast of $230 billion and well below the $285.4 billion consensus on FactSet.
The brokerage said this represents a 44% drop from the previous quarter and a 3% decline year-over-year.
Oppenheimer also lowered its revenue forecast for Coinbase to $1.42 billion, versus the $1.67 billion expected by analysts. The company is scheduled to report earnings later this month.
“The setup for (Coinbase) going into the (second-quarter) print appears to be unfavorable,” Oppenheimer analysts Owen Lau and Guru Sidaarth said.
“That said, the buy side seems to be well aware of this weak print and downward earnings-estimate revision.”
Diversified growth avenues offer support for future
While US spot trading volumes declined sharply in the second quarter, Oppenheimer highlighted that Coinbase’s derivatives and international exchange notional volumes held up more resiliently.
Though these areas currently contribute minimally to revenue, the brokerage views them as key to Coinbase’s long-term growth.
Oppenheimer maintained its “outperform” rating on the stock and raised its price target from $395 to $417.
It added that a better entry point for investors may emerge after the upcoming earnings release.
“We believe a more attractive entry point could happen after the print,” Oppenheimer said.
The brokerage raised its price target on the Coinbase stock to $417 from $395, with an outperform rating.
The company’s shares were up 1.95% in Monday afternoon trade.
Legislation fuels optimism amid price surge in crypto assets
Coinbase shares have surged more than 100% since the start of the year.
The rally has been attributed to several factors, including the company’s inclusion in the S&P 500, improving regulatory visibility, and the broader rise in digital asset prices.
On Monday, crypto assets rallied sharply as investors anticipated the potential passage of key legislation under consideration in the US House of Representatives.
Three major bills—the Clarity Act, the Genius Act, and the Anti-CBDC Surveillance State Act—are scheduled for review this week as part of “Crypto Week.” President Trump has urged lawmakers to expedite the legislation.
Bitcoin hit a new all-time high Monday morning, while crypto-related equities also moved higher.
Coinbase reached a $100 billion market cap milestone for the first time, and Robinhood shares rose 1.3% in midday trading.
Benchmark analyst Mark Palmer said the Clarity Act, in particular, could be transformative.
“We believe the enactment of the Clarity Act would likely spur the widespread adoption of digital assets by institutional investors,” Palmer noted, citing long-standing concerns over regulatory ambiguity that have kept major financial players on the sidelines.
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