Coinbase Q1 Earnings Preview: Analysts Say Exchange 'Key Beneficiary Of Crypto Economy' Thanks To Bitcoin ETFs

Cryptocurrency company Coinbase Global COIN will report first-quarter (Q1) financial results after market close on Thursday, May 2, 2024.

Read on for earnings estimates, analyst ratings, price targets and the key items to watch:

Ratings & Targets:

• HC Wainwright: Buy rating, raised price target from $250 to $300
• JPMorgan: Neutral rating, $150 price target
• Bernstein: Market Perform rating, raised price target from $80 to $200
• Compass Point: Buy rating, raised price target from $235 to $325
• Mizuho Securities: Underperform rating, raised price target from $84 to $145
• Piper Sandler: Neutral rating, raised price target from $225 to $245
• Bank of America: Underperform rating, raised price target from $92 to $110

Earnings Estimates: Analysts expect Coinbase to report first-quarter revenue of $1.34 billion, according to data from Benzinga Pro.

The company reported revenue of $772.53 million in last year's first quarter. Coinbase has beaten revenue estimates from analysts in five straight quarters.

Analysts expect the company to report earnings per share of $1.00 for the first quarter, compared to a loss of 34 cents in last year's first quarter. Coinbase has beaten earnings per share estimates in four of the last five quarter, including four consecutive quarters.

The company has not guided for revenue estimates but said previously it expects first-quarter subscription and services revenue to be in a range of $410 million to $480 million.

Related Link: EXCLUSIVE – Bitcoin Hits New All-Time High – Here’s When Benzinga Readers Think $100K Milestone Could Be Reached

What Analysts Say: The first quarter was an "eventful quarter for the cryptoecosystem," JPMorgan analyst Kenneth Worthington said.

The analyst said Coinbase could be a key beneficiary of the increased trading activity.

Worthington expects Coinbase to post subscription and services revenue of $450 million. The analyst also sees Base, which is Coinbase's Layer 2 platform, contributing more meaningful in the quarter at around $20 million in net revenue.

"We see Coinbase as both a leading driver and beneficiary of the cryptocurrency economy, and we previously underestimated the strength of the U.S. spot Bitcoin ETFs in its early days – launched January 2024 – as a key catalyst for the crypto industry," Worthington said.

The analyst said Coinbase's revenue generation could benefit in the short term with a crypto rally.

"We see the longer term success of Coinbase being driven by development, with our focus on tokenization and payments."

Key Items to Watch: When Coinbase reported fourth-quarter financial results, the company said its three main priorities for 2024 would be driving revenue through improving core trading, driving utility in crypto with experiments in payments and driving regulatory clarity for the industry.

Investors and analysts will watch for all of these items in the upcoming quarterly report.

The biggest item likely watched by those looking at Coinbase will be the impact the approval and launch of Bitcoin BTC/USD ETFs had on the company in the first quarter.

Investors will also be looking to see how big of an impact on trading volume and transaction revenues Bitcoin had compared to other cryptocurrencies. Bitcoin represented 31% of trading volume and 29% of transaction revenues in the fourth quarter.

The balance of transaction revenue with the company's subscription and services revenue could also be something to monitor. The transaction revenue is larger but can also be more volatile from quarter to quarter, while the subscription and services revenue is growing and also important for the company increasing efforts for profitability.

COIN Price Action: Coinbase shares were up 3% to $210.09 on Wednesday versus a 52-week trading range of $46.43 to $283.48.

Read Next: Coinbase Up 300% In A Year, But Faces Bearish Technicals Ahead Of Q1 Earnings

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