Coinbase Global (COIN) shares fell on Wednesday after the largest U.S. cryptocurrency exchange reported third-quarter earnings that trailed analysts’ forecasts.
Coinbase Global stock was down 5.11% at $339.03 at last check after the company reported net income of $406 million, or $1.62 a share, for the third quarter, up from $81 million, or 23 cents, a year ago but below the FactSet analyst consensus of $1.77 a share.
Revenue came in at $1.31 billion in the third quarter, more than quadrupling the year-earlier total of $315 million and matching analysts’ estimates, though the exchange pointed to a summer lull in cryptocurrency trading as reason for not beating Wall Street forecasts.
Citi analyst Peter Christiansen said in a research note published last week prior to the earnings report that Coinbase’s stock offers investors direct exposure to increased retail and institutional cryptocurrency adoption.
As a crypto-economy facilitator, Christiansen said the shares are positioned to make “higher highs and higher lows” relative to crypto volatility as adoption increases.
He also sees additional opportunities for Coinbase to benefit as the company potentially expands its offerings beyond facilitating transactions into cold wallet storage, prepaid debit cards and nonfungible tokens, or NFTs.
For the fourth quarter, Coibase said it expects trends seen in October to continue, including “…higher levels of activity among retail traders who have historically traded more on Coinbase during periods of heightened volatility.”
“We believe that retail monthly transacting users and total trading volume will be higher in Q4 as compared to Q3,” the company said.