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Raymond James maintained its Underperform rating on Coinbase (NASDAQ:COIN) in a note on Friday, stating that the cryptocurrency exchanges transaction volumes continue to march lower.
The firm updated its model ahead of Coinbase’s third-quarter results.
“We are lowering our 2Q22 adjusted EBITDA estimate by ~$14 million (to -$252 million) and our full-year 2022 estimate by the same amount. Our 2023 and out-year adjusted EBITDA estimates are roughly unchanged,” wrote Raymond James analysts.
They stated that Coinbase transaction volumes continue to be soft, with third-quarter results continuing to show meaningful year-over-year declines.
“While the company has taken steps to offset depressed revenue, including a reduction-in-force, the path to positive adjusted EBITDA will likely require much-improved trading volumes,” added the analysts.
However, they went on to state that whether that improvement will take place is very much an open question.
“While management remains optimistic this is only a temporary ‘crypto winter,’ major cracks in the ecosystem and reduced confidence in crypto as an inflation hedge call this into question, in our view. Meanwhile, regulatory scrutiny continues to increase, as do competitive pressures.”
