Coinbase (Nasdaq: COIN) is expected to beat consensus forecasts for total revenue and trading volume in the third quarter due to recent volatility in bitcoin price. Oppenheimer analyst Owen Lau mentions that trading volume has improved in August and September due to all the news driving volatility.
Lau predicts an 18 percent potential upside in trading volume and an eleven percent possible upside in overall revenue predictions. This is based on the exchange’s “significantly” better trading activity in the second part of the third quarter. The company moved to hastily end its Lend product and took a lot of macro risks with Evergrande in China. These, along with other factors like increased government scrutiny, bitcoin’s retreat, and the 2 billion dollar debt raise, contributed to a rough September for Coinbase. Their stock dropped 12.2 percent versus the S&P 500’s 4.8 percent drop.
JMP Securities was optimistic on Coinbase shares late last month, setting a $300 price objective and a market outperform assessment on the stock. COIN is presently selling at about $250 per share.
So, at its present price, is the stock a good buy? Coinbase is presently valued at around eighteen times anticipated profits for 2021, which is a decent price for a futuristic business with strong earnings prospects. Coinbase is a dominant player among cryptocurrencies and can become one of the most transformative technologies of our time. The company’s reputation for openness, security, and compliance may help it become the go-to platform.
Coinbase is also attempting to decrease its business’s volatility by doubling down on areas such as blockchain technology. It is boosting its exposure to institutional clients, who are more stable than regular traders. The stock’s worth is estimated to be at $295 per share, suggesting a 30% potential gain over the current market price.