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 an 18% potential upside to trading volume and an 11% upside to total revenue estimates, citing the exchange’s “substantially” improved trading volume in the second half of the third quarter.
Coinbase shares had a “rough” September with the stock down 12.2% versus the S&P 500?s 4.8% dip – likely hurt by increased regulatory scrutiny, the retreat of bitcoin, the company’s move to preemptively end its Lend product, its $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 the third quarter 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.