Coinbase Stock Plummets 63% After Third Straight Earnings Miss
Coinbase Global (COIN) stock has fallen by 63% from its high of $402.16 reached last year, closing at $148.47 on August 14, a hair above its 52-week low. The decline comes after the company's third consecutive earnings miss, with a GAAP net loss of $359.5 million in Q2.
The stock's price-to-earnings multiple is currently around 130 times next-twelve-months earnings, which would only be justified if the recovery timeline holds and earnings start to grow again. However, with revenue falling by 18.5% from a year ago and 13.7% from the prior quarter, it's unclear when this will happen.
Coinbase's diversification story is still a work in progress, but the company's inability to offset the decline in trading volumes and volatility has raised concerns about its future growth prospects. The stock's price performance has been driven by investors who are betting on a crypto-beta trade, but this may not be sustainable if the market continues to trend lower.
The company's adjusted EBITDA came in at $207.8 million against expectations of roughly $300 million, a 31% shortfall that raises questions about its ability to generate earnings growth. The Street's mean target of around $196 is well below TIKR's mid-case scenario, indicating that even Wall Street is underwriting a more cautious recovery than expected.