Cryptocurrency trading platform company Coinbase Global Inc
Here are the key earnings estimates, what analysts are saying, and key items to watch for investors.
Earnings Estimates: Analysts see Coinbase reporting fourth-quarter revenue of $822.36 million, according to data from Benzinga Pro.
The company reported $629.11 million in revenue in last year's fourth quarter. Coinbase has beaten analysts' revenue estimates in four straight quarters.
Analysts estimate that Coinbase will report a loss of 1 cent per share in the fourth quarter, improving on a loss of $2.46 reported in the year-ago period. The company has missed earnings per share estimates from analysts in four of the last seven quarters.
The company did not provide total revenue guidance for the fourth quarter, but said it expects subscription and services revenue to be flat quarter-over-quarter in the fourth quarter.
Subscription and services revenue was $334.4 million in the third quarter, which was flat compared to the second quarter.
What Analysts Are Saying: Analysts at Oppenheimer recently upgraded shares of Coinbase from Perform to Outperform with a price target of $160.
The analysts see Coinbase having a favorable outcome in an ongoing lawsuit with the SEC.
The approval of Bitcoin ETFs could also have a positive impact on Coinbase, while some expect the launch to offer increased competition to Coinbase, the analysts said.
JPMorgan analyst Kenneth B. Worthington said the start to Bitcoin ETF trading was "underwhelming" and downgraded shares of Coinbase from Neutral to Underweight with an $80 price target maintained.
The analyst highlighted positives for Coinbase's position in the cryptocurrency sector.
"See Coinbase as both a leading driver and beneficiary of the cryptocurrency economy," Worthington said.
The analyst sees a "highly-competitive and costly" space for international cryptocurrency expansion for Coinbase, with Binance the main competition.
Coinbase is well positioned for growth according to Needham analyst John Todaro.
The analyst has a Buy rating on the stock and raised the price target from $160 to $180.
Todaro added Coinbase to the Conviction List with praise for product growth, international expansion and the launch of the Base Ethereum Layer 2 chain.
The analyst highlights several key factors in relation to Coinbase, including the approval of Bitcoin ETFs, the forthcoming Bitcoin halving event, user-friendly retail applications, and deep liquidity.
Here's a look at other Coinbase analyst activity in January:
- Citigroup: Neutral rating, raises price target from $90 to $151
- Mizuho: Underperform rating, raises price target from $54 to $60
- Wedbush: Outperform rating, raises price target from $160 to $180
As the custodian for numerous approved ETFs, Coinbase is seen by some as a big winner of the ETF launches, thanks to its assistance to the ETF firms. Conversely, others perceive the new Bitcoin ETFs as rivals competing for the capital of retail investors seeking Bitcoin exposure.
Several analysts emphasized international expansion as a crucial point ahead of the earnings report, and it is expected to be a major focus for the company as it seeks future growth.
Another area of focus could be the diversification of cryptocurrencies. Bitcoin made up 38% of trading volume and 37% of transaction revenue for Coinbase in the third quarter. Ethereum made up 19% of trading volume and 18% of transaction revenue for Coinbase in the third quarter.
The approval of Bitcoin ETFs raises a question for investors: Will this lead to a significant change in trading volume and transaction revenue for the leading cryptocurrency, or will the figures align with those of previous quarters?
COIN Price Action: Coinbase shares are up 12.7% to $158.52 at the time of publication Wednesday. Shares of Coinbase are up over 170% in the last year, outperforming a 132% gain for Bitcoin.
