Coinbase Stock: A Closer Look
Coinbase shares experienced a decline following the release of weaker-than-expected third-quarter earnings. However, H.C. Wainwright analyst Mike Colonese remains optimistic, maintaining a buy rating on the stock.
On October 30, Coinbase, the largest publicly traded crypto exchange, unveiled its Q3 earnings report, indicating a top-line miss. This outcome, largely attributed to lower crypto prices during the quarter, could have short-term implications on share prices.
Despite the revenue miss, the overall performance in Q3, 2024 was viewed favorably. Key positives include effective expense controls and revenue diversification. Additionally, a bullish outlook for crypto prices in the next 12 months, coupled with regulatory clarity, presents potential upside catalysts.
Notably, CEO Brian Armstrong’s positive stance on the upcoming election’s impact on the crypto sector is highlighted. Furthermore, Coinbase’s initiation of a $1 billion share repurchase program underscores the company’s commitment to enhancing shareholder value.
Colonese reiterated a buy rating for Coinbase, with a revised price target of $255. H.C. Wainwright analysts have adjusted revenue estimates for 2024 and 2025 downwards, projecting figures below previous forecasts.
In the third quarter, Coinbase reported total revenues of $1.21 billion, showing both a quarterly decline and a substantial year-over-year increase. Despite missing FactSet estimates slightly, the company’s performance indicates resilience.
Risks to the buy rating and price target include challenges such as concentration of retail trading revenue, volatility in crypto prices, and regulatory uncertainties.
