Coinbase (NASDAQ: COIN) is likely to top consensus estimates for trading volume and total revenue for the third quarter due to recent volatility in the price of bitcoin, according to Oppenheimer analyst Owen Lau.
- Lau estimates there is 18% potential upside to trading volume and 11% upside to total revenue estimates, citing the exchange’s “substantially” improved trading volume in the second half of 3Q.
- Coinbase shares had a “rough” September with the stock down 12.2% versus the S&P 500 down 4.8% – likely hurt by increased regulatory scrutiny, the retreat of bitcoin, the move to preemptively end its Lend product, Coinbase’s $2 billion debt raise and macro risks associated with Evergrande in China.
- “With all the news driving volatility, trading volume has substantially improved in late August and September,” Lau wrote in a note.
- Lau, who has an outperform rating on the shares and a $444 price target, estimates that Coinbase has $6.5 billion in cash as of 3Q that can be potentially used for new product development, M&A, diversification and increased balance sheet investment in crypto.
- Late last month, JMP Securities was also bullish on Coinbase shares, putting a $300 price target and market outperform rating on the shares.
- COIN shares are currently trading at around $250.