Risk/Reward Rating: Negative
Coinbase stock was up over 7% this morning in response to its Q2 2021 earnings report which handily beat estimates. Furthermore, the stock was up 26% over just the past six trading days in anticipation of the results. Prior to this sprint upward, the stock had been testing its lowest trading range since the IPO in April of 2021.
The company reported pre-tax earnings of $869 million in Q2 2021 and $1.865 billion for the first six months of the year. As a percentage of revenue, these are extraordinary margins of 39% and 46% respectively. The key to Coinbase’s elevated profitability is the US retail investor, as can be seen in the following tables.
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