'Coinbase Is Focused In A Complicated Environment,' Will Benefit From Bitcoin ETF Approval: Analyst

Several analysts maintained the rating on Cryptocurrency trading platform Coinbase Global Inc COIN following Q3 FY23 results.

Yesterday, Coinbase reported revenue of $674 million, down 5% Q/Q, beating the consensus estimate of $653.19 million.

JMP Securities analyst Devin Ryan reiterated the Market Outperform rating and $107 price target.

The analyst is pleased with the better quarter and encouraged that the company has kept its focus in a complicated environment, progressing on numerous new initiatives that have the potential to become material business drivers over time.

Ryan expects the company to witness continued momentum with ecosystem interest improving in November, mainly around spot Bitcoin exchange-traded fund (ETF) optimism. 

The analyst estimates revenue and EPS of $2.82 billion and $(1.22) in FY23 and $3.14 billion and $(1.67) in FY24.

H.C. Wainwright analyst Mike Colonnese reaffirmed a Buy rating with a price target of $115.

While Q3 was better than expected, the analyst expects a muted to slightly negative reaction in shares on the recent rally in the stock and the magnitude of the top line beat being much less than in Q2. 

Going forward, Colonnese projects several factors, such as SEC approval of a spot Bitcoin ETF by Q1 FY24 and the Bitcoin halving event in April 2024, to drive higher trading volumes on COIN’s platform.

Also, the analyst sees recently launched derivatives products to retail and institutional investors in the U.S. and abroad, driving estimates up over the next year. Colonnese estimates revenue and EPS of $2.85 billion and $(1.18) in FY23 and $3.28 billion and $(0.41) in FY24.

Needham analyst John Todaro maintained a Buy rating and a $120 price target.

The analyst is cautiously optimistic that volumes bottomed and expects growth in Q4 FY23. Todaro sees possible ETF and Halving as a tailwind and expects revenue and EPS estimates of $2.95 billion (vs. $2.96 billion earlier) and $(0.75) vs $(1.71) prior for FY23 and $4.66 billion and $1.49 (vs $0.26 prior) for FY24. 

Oppenheimer analyst Owen Lau reiterated Perfrom rating on COIN.

The analyst says the stock is driven by industry catalysts such as spot Bitcoin ETF approval and halving and progress from the courts in its lawsuit with the SEC in the near term. 

In a challenging market, Lau estimates that COIN can generate adj. EBITDA of ~$800 million annually. 

The analyst expects Q4 results to be similar to Q3, estimating revenue and EPS of $2.9 billion and $(1.05) in FY23 and $2.9 billion and $(0.89) in FY24.

Wedbush analyst Moshe Katri maintained the outperform rating with a price target of $110. The analyst projects revenue and EPS of $2.60 billion and $(2.04) for FY23 and $2.86 billion and $(2.36) for FY24.

Canaccord Genuity analyst Joseph Vafi kept a Buy rating and a price target of $140.00. The analyst lowered sales estimates to $2.87 billion (from $2.94 billion) for FY23 and $3.32 billion (from $3.33 billion) for FY24.

On the other hand, Mizuho analyst Dan Dolev reaffirmed the Underperform rating and price target of $27.00.

The analyst writes that while rising retail take rates may have saved the day in Q3, the underlying fundamentals continue to worsen for the company as retail volumes continued to slide to new lows and subscription & services revenue (ex., interest income) declined.

Consequently, despite the “beat,” the analysts expect a muted stock reaction. 

Also Read: Coinbase Advanced Introduces Crypto ‘Nano’ Futures Accessible To US Retail Traders

Price Action: COIN shares are trading higher by 1.46% at $85.83 on the last check Friday.