What happened

Shares of the large cryptocurrency exchange Coinbase Global (COIN 2.72%) traded about 2% lower as of 10:50 a.m. ET today after the company reported fourth-quarter and full-year earnings results for 2021.

So what

Coinbase reported earnings per share of $3.32 on total revenue of nearly $2.5 billion in the fourth quarter, easily beating analyst estimates. Trading volume on the platform hit a record high of $547 billion, while assets on the platform grew to $278 billion. Monthly transacting users (MTU) grew to 11.4 million in Q4, up 4 million from the sequential quarter and 8.6 million year over year.

Red line with arrow moving downward.

Image source: Getty Images.

Management is guiding for average annual retail MTU to range from 5 million to 15 million users in 2022. In the middle or high end of that range, management expects Coinbase to be profitable. At the lower end of the range, Coinbase does not expect adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to be more than a $500 million loss. Management also said that the first quarter is "trending softer" so far.

"So I don't think we're entering a crypto winter," Coinbase co-founder and CEO Brian Armstrong said on the earnings conference call. 

Armstrong added, "I think we basically have no idea what's going to happen in the next quarter, the next couple of quarters, or at any moment in our history with crypto, it's like trying to predict what the S&P 500 is going to be next quarter or something like that."

Now what

Coinbase stock is down nearly 50% since going public last April, but the majority of analysts have remained bullish on the company, giving the stock a median price target of $300, implying significant upside from current levels.

The volatility in the crypto market and the wide range of guidance from management brings a lot of uncertainty into play. But trading at 6.4 times revenue and under 16 times earnings, the stock offers a solid risk-reward proposition.