Coinbase (Nasdaq: COIN), the largest cryptocurrency exchange in the United States, saw its stock price plummet after announcing its second-quarter results. With net income dropping 89% year-on-year, investor sentiment sharply contracted as most performance metrics fell short of market expectations.
According to the results released on the 31st (local time), Coinbase's adjusted net income for the second quarter was $33 million (12 cents per share). This represents an 89% sharp decline from $294 million ($1.10 per share) in the same period last year.
The main reasons for the performance deterioration are weakened digital asset market volatility and decreased trading volume. In particular, consumer trading volume dropped to $4.3 billion, a 45% decrease, as individual investor trading activity significantly reduced, and consumer trading revenue consequently declined by 41% to $650 million. Overall trading volume decreased by 40% compared to the previous year.
This trend was also clearly reflected in the gap with market expectations. Coinbase's adjusted earnings per share of 12 cents was 92% below Wall Street's forecast of $1.51. Total revenue was also $1.5 billion, falling short of the market expectation of $1.59 billion.
However, some positive indicators were present. Subscription and service revenue increased by 9.5% year-on-year to $656 million, with stablecoin revenue reaching $332.5 million, accounting for more than half of the total revenue. Particularly, the recent passage of the U.S. House of Representatives' stablecoin regulation bill (GENIUS Act) was seen as a positive momentum.
Can COIN Stock Rebound Again?
Despite the poor performance, securities firms' perspectives are mixed. Citizens JMP maintained Coinbase's target price at $440 and assigned an 'market outperform' rating, indicating potential growth of about 36% from the current stock price.
JMP stated, "The current performance is merely an evaluation based on the existing business model," and "If Coinbase evolves into a platform trading all assets, its growth potential could be much larger."
Market research firm Tipranks proposed a 12-month average target price of $383.29 for COIN stock. While optimistic analysts forecast a rebound up to $510, pessimistic scenarios also suggested a potential decline to $205.
