Raymond James analyst Patrick O'Shaughnessy reiterated an Underperform rating on Coinbase (NASDAQ:COIN) ahead of Q1 results.
The analyst expects to see year-on-year (YoY) volume declines for the company for the first time as a public company amid difficult comps.
“Longer-term, we continue to expect substantial pricing compression from competition as well as the unification of Coinbase's two retail apps into one lower-priced app. We also can’t overemphasize the regulatory and political risks facing the business model such as the applicability of existing securities laws to revenue streams such as Staking, new tax reporting requirements, the examination of best execution obligations for brokers, and the SEC potentially deeming crypto tokens to be securities,” O'Shaughnessy said in a client note.
O'Shaughnessy expects softer trading volumes on both a y/y and sequential basis with expectations that both will miss the consensus. This adds to softer average daily volumes (ADV) and flat crypto prices.
Net-net, the analyst lowered the 1Q22 non-GAAP EPS estimate to $0.51 from $0.68 with 2022 and out-year estimates also cut.
Coinbase stock is down 2.7% in pre-market Monday.
By Senad Karaahmetovic