Benzinga | May 12, 2021 10:31AM EDT

Coinbase's Stock Could Fall To $100 Or Lower, Says Research Firm

Shares of the major United States cryptocurrency exchange Coinbase Inc. (NASDAQ:COIN) could fall to $100 or less, according to a recent analysis. This would mean a fall of about 67% compared to the stock's current price of $304.

What Happened: Coinbase shares are likely to fall because the firm might be unable to reach future profit expectations, according to Nashville-based stock research firm New Constructs.

The company's CEO David Trainer explained that the exchange's current valuation implies that it "will exceed the combined revenue of Intercontinental Exchange and Nasdaq," Coindesk reported.

But he added, "We do not expect [Coinbase] to report any news from Q1 that could justify owning shares at current levels."

Coinbase is scheduled to report its first earnings on Thursday after announcing a year-on-year revenue of about $500 million and an increase in user count.

Some suggest that the company still has significant earnings upside potential, but Trainer expects Coinbase's stock to continue to underperform despite favorable yearly earnings.

"No earnings report, in our opinion, will be strong enough to convince investors the company will exceed the extraordinary expectations for profits already baked into the current price," he added.

See also: Coinbase Options Traders Plan To Bank On Earnings

Trainer also suggested that rising competition and tapering of profits for Coinbase could further hurt its valuation.

This strikes a note with the suggestions made by an early April report that claimed that the firm's $100 billion valuation at the time of its Nasdaq (NASDAQ:NDAQ) listing was ridiculous.

Price Action: Coinbase's stock was trading at over $304 with a 0.096% gain at press time.

Image: Courtesy of Coinbase