Analysts at Mizuho are casting doubt on Coinbase’s (NASDAQ:) consensus earnings expectation, predicting a 10% miss.
Their note assessed factors leading to their bearish outlook. “We believe consensus is overly optimistic in extrapolating strong March trends,” states Mizuho.
They point to a decline in trading activity as a key concern. “Average daily trading volumes (ADTV) on the COIN platform declined sequentially each month of the quarter,” the note reveals, resulting in what they see as a likely 30% drop in total volume compared to Q1.
This decline extends into market share, with Coinbase losing ground to competitors. “In 2Q, COIN lost ~50bps of market share vs. its largest exchange peers,” Mizuho reports, with a further 100bps decline in July, reaching the lowest level since May 2023.
These trends translate into lower revenue expectations for Coinbase. “We are lowering our 2Q top-line estimates,” Mizuho announces, “and now expect revenue to come in ~10% below Street.” Their revised estimate of $1.29 billion sits significantly below the current consensus.
Mizuho tempers expectations for future profitability as well. “Our 2025E EBITDA estimate of $2.1bn (vs. $1.9bn prior) remains well below $2.8bn Street,” the firm adds.
Overall, Mizuho reiterates its Underperform rating on Coinbase, maintaining a $145 per share price target on the stock.
