Coinbase 3Q ‘likely to be sealed with a miss’ – Mizuho

Coinbase’s (NASDAQ:) 3Q “is likely to be sealed with a miss,” according to Mizuho analysts.

In a note to clients Wednesday, the analysts maintained an Underperform rating and $27 price target on the stock, stating they expect “dwindling volumes (i.e. $28bn in July, $24bn in August, and $20bn in September) combined with an expected drought in retail trading to meaningfully weigh on 3Q revenue.”

The firm sees revenue for the quarter as 10% below the current consensus levels. The firm lowered its 3Q revenue estimate for Coinbase by 7%.

“Volumes continue to decelerate. In 2Q, average daily trading volumes on the COIN platform were ~$1bn. This decelerated to ~$900mn in July, ~$790mn in August, and ~$665mn in September. As a result, we are lowering our 3Q volume estimate from $88bn to $72bn,” they explained.

One of the reasons for the firm’s call is that they believe that poor volumes on the HOOD platform bode poorly for COIN’s retail volumes, which is “likely to negatively impact potential upside to take rates.”

“We note that COIN reported 39bps take rates in July (i.e. $110mn of transaction revenue on $28bn of volume), but weakness in HOOD’s crypto volumes in August vs. July allow us to reasonably assume that COIN’s blended take rates recede slightly off of July’s 39bps in August,” the analysts added.

COIN shares are down more than 2% so far in Wednesday’s session.