JPMorgan, which rates Coinbase overweight, is the most optimistic on trading volume, forecasting $173 billion for the quarter. Barclays predicts $147 billion and Oppenheimer $141 billion. That puts their transaction revenue estimates between $578 million and $694 million, while total revenue forecasts range from roughly $1.2 billion to $1.4 billion.
For adjusted earnings before interest, taxes, depreciation and amortization (ebitda), JPMorgan forecasts $323 million, Barclays, with an underweight rating, $360 million and Oppenheimer, which rates the company outperform, $262 million.
The analysts agree that Coinbase remains heavily exposed to swings in crypto trading. Barclays noted that September’s pickup in spot volumes appeared to lose steam in early October, while Oppenheimer cut its trading volume forecast by 20% amid weaker market activity.
Stablecoin revenue offers a cushion
Coinbase’s stablecoin business could provide some relief. The exchange earns a share of the income generated from reserves backing $USDC, the dollar-backed token issued by Circle Internet CRCL$79.47. JPMorgan expects $320 million in stablecoin revenue for the quarter, giving Coinbase a source of income that doesn’t depend on customers placing trades.
But lower interest rates could reduce returns on $USDC reserves, while competition could put pressure on Coinbase’s share of the income, adding risks to that line of business.
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