Monitors show Coinbase signage during the company’s initial public offering (IPO) at Nasdaq MarketSite in New York on Wednesday, April 14, 2021.
Michele Nagel | Bloomberg | Getty Images
Coinbase said on Tuesday that revenue fell 27% year-on-year to $ 1.17 billion, which is less than the $ 1.48 billion forecast by Wall Street. It also claimed it lost $ 430 million in the first quarter.
Usage on Coinbase decreased compared to the fourth quarter. Monthly retail transaction users fell to 9.2 million, down from 11.4 million in the fourth quarter. Total trading volume decreased from $ 547 billion in the fourth quarter to $ 309 billion.
The earnings report comes in the midst of a broader sell-off in the tech sector and the cryptocurrency market is experiencing a severe downturn. Bitcoin, the world’s largest digital currency by market value, fell more than 50% from its high price of $ 68,990.90 in November 2021. It was down 6% as of Wednesday morning, trading below $ 30,000.
Several companies cut their price target on Coinbase shares following the report.
“Revenues were below expectations across the board, while expenses rose faster than expected to significantly reduce earnings,” analysts at JPMorgan said in a statement. The company cut its price target to $ 171 from $ 258.
Goldman analysts downgraded the stock to neutral, saying in a note to customers on Wednesday that they believe Coinbase is unlikely to return to profitability in the near term.
“In an environment where the market is focused on profitability, recession risk and fading
the exuberance caused by the pandemic in retail, we believe that COIN shares will struggle to outperform in the short term, ”analysts wrote.
– CNBC’s MacKenzie Sigalos and Michael Bloom contributed to this report.