Coinbase, the leading publicly traded cryptocurrency exchange in the United States, finds itself under increasing scrutiny from Wall Street. As analysts prepare for the company's upcoming quarterly earnings report, they have significantly reduced their price targets, reflecting concerns about the platform's performance in a challenging market.
Since the start of the year, shares of the San Francisco-based exchange have tumbled by 34%, currently trading around $152 after a 6% decline in recent trading sessions. This drop corresponds with a broader downturn in digital assets, as Bitcoin has fallen 27% over the past month, settling at approximately $67,000.
Analysts from JPMorgan have downgraded their year-end stock forecast for Coinbase from $399 to $290. They attribute this revised figure to reduced trading activity and a decrease in the supply of stablecoins, which are crucial for trading and market liquidity. Moreover, they noted the intensifying competition from international exchanges looking to establish a presence in the U.S. market.
Cantor Fitzgerald has also lowered its price target for Coinbase shares from $277 to $221, while Citi has adjusted its forecast from $505 to $400. Despite these cuts, all three firms maintain a positive outlook on Coinbase's stock overall.
In the third quarter of the previous year, Coinbase reported transaction revenues exceeding $1 billion, surpassing analysts' expectations with earnings of $1.44 per share compared to an anticipated $1.09. For the upcoming fourth quarter, projections indicate earnings per share to decline further to around $1.05. Investors should closely monitor these earnings results as they could signal the company's capacity to navigate the challenging environment ahead.