Coinbase Shares Dip Despite Earnings Beat: Analysts Mixed On Future Prospects

Coinbase Global Inc COIN shares were trading slightly lower on Friday after the company issued earnings on Thursday. The cryptocurrency platform, currently under U.S. regulatory scrutiny, reported a loss of 42 cents per share, which beat the expected 78 cent loss, on revenues of $707.09 million, beating the $643.36 million consensus estimate.

Despite a 13% quarter-over-quarter decrease in transaction revenue at $327.1 million and a 7% drop in subscription revenues from the first quarter at $327 million, the print, along with fresh analyst perspectives, pushed shares nearly 2% higher during early trading on Friday before the stock began selling off.

Here's what the analysts have to say.

The Needham Analyst: John Todaro reiterated a Buy rating on Coinbase and a price target of $120.

Todaro said that while volumes were disappointing and the market cap of USDC continues to dwindle, Coinbase seems to be in a strong position, especially as competitors retreat. With Bitcoin and other cryptos gaining momentum, and a potentially brighter outlook on regulation, Needham still views Coinbase as a strong investment.

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The Canaccord Analyst: Joseph Vafi reiterated a Buy rating on the stock, and left its $140 price target unchanged.

Vafi praised Coinbase’s business model, noting its resilience despite the regulatory challenges and lower trading volumes industry-wide. The analyst added that Coinbase’s cost structure is now half of what it was a year ago and that its share is growing despite a reduced operating footprint.

However, Canaccord warns that much of the stock’s future movement will depend on the evolving regulatory environment.

The Raymond James Analyst: Patrick O’Shaughnessy reiterated an Underperform rating on Coinbase, and did not give a price target.

O’Shaughnessy highlighted that the lawsuit filed by the SEC this quarter underlines the massive regulatory risks the company is facing. Despite improved financial results, the analyst argues that the current retail pricing model isn’t sustainable long-term and struggles to see a path towards substantial profitability.

The Piper Sandler Analyst: Patrick Moley set a Neutral rating on the stock, and raised the price target from $60 to $80.

Moley said the robust retail fee capture rate was great news, but warned that it’s not likely sustainable. While Piper Sandler acknowledged Coinbase’s potential as a major player in the cryptocurrency space, they’re looking for more progress on the regulatory front and an improvement in the company’s fundamentals before shifting to a more positive outlook.

COIN Price action: Shares of Coinbase are trading 1.3% lower to $89.50, according to Benzinga Pro.

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