🌎 Coinbase Shares Dip on Earnings Miss, Analyst Maintains Buy Rating

Coinbase shares experienced a decline following the company’s weaker-than-expected third-quarter earnings. Despite this, H.C. Wainwright analyst Mike Colonese continues to maintain a buy rating on the stock.

On October 30, Coinbase, the largest publicly traded crypto exchange, released its third-quarter earnings report. According to Colonese, the report showed an “uncharacteristic top-line miss,” which may impact the company’s shares in the short term. This revenue miss was largely due to lower crypto prices during the quarter, but overall, the quarter was still solid.

Positive Aspects for Coinbase

Despite the revenue miss, there are several positive aspects for Coinbase:

Expense controls
Revenue diversification

The next 12 months also offer a bullish outlook for crypto prices, with regulatory clarity potentially serving as an upside catalyst.

“We were encouraged to hear management’s positive views on the upcoming election and the implications for the crypto sector. Specifically, CEO Brian Armstrong believes the U.S. will have the ‘most pro-crypto Congress ever’ regardless of who wins next week’s presidential election. Lastly, Coinbase recently initiated a $1B share repurchase program, as the company aims to return capital to shareholders in the future.”

Colonese reiterated a buy rating for Coinbase, with a price target of $255, down from $295, reflecting the revised revenue estimate for 2025.

Revised Revenue Estimates

H.C. Wainwright analysts have adjusted their revenue estimates for Coinbase:

Projected $5.45 billion for 2024 (down from $5.67 billion)
Projected $5.37 billion for 2025 (down from $6.25 billion)

In the third quarter, Coinbase reported total revenues of $1.21 billion, a 17% decline quarter over quarter but an 86% increase year over year, slightly below FactSet estimates of $1.26 billion.