Coinbase Beats Expectations with Q1 2024 Earnings, Strong Sell Rating Maintained

Barclays's Benjamin Budish raised their price target on Coinbase (NASDAQ: COIN) by 14% from $179 to $204 on 2024/05/06. The analyst maintained their Strong Sell rating on the stock.

Coinbase, a leading provider of financial infrastructure and technology for the crypto economy, recently reported its Q1 2024 earnings. The company exceeded expectations with an EPS of $1.65, beating the Zacks Consensus Estimate of $1.04, and a revenue of $1.64 billion, surpassing the Zacks Consensus Estimate by 29.55%. Additionally, Coinbase's adjusted EBITDA for Q1 2024 was $1.014 billion, a significant increase from the previous year.

In the company's Q1 2024 earnings report, management provided guidance for the upcoming quarter. They expect Q2 subscription and services revenue to be within a range of $525 million to $600 million, assuming crypto asset prices remain stable. Transaction expenses are projected to be in the mid-teens as a percentage of net revenue, while expenses related to technology & development, general & administrative, and sales & marketing are also expected to increase.

Management expressed satisfaction with the company's financial performance in Q1, highlighting their focus on product expansion, operational discipline, and the favorable crypto market conditions. They emphasized their progress in driving revenue, utility, and regulatory clarity, including increased market share in the US spot and derivatives market, all-time highs on Coinbase Prime, and a rise in USDC market capitalization.

Goldman Sachs analyst Will Nance also weighed in on Coinbase's stock on May 6, 2024. Nance lowered their price target by 13.6% from $295 to $255, while maintaining a Hold rating on the stock.

According to data from WallStreetZen, 54.5% of top-rated analysts currently rate COIN as a Strong Buy or Buy, while 36.4% consider it a Hold. Only 9.1% of analysts recommend or strongly recommend selling the stock. The consensus forecast among analysts predicts COIN's upcoming year will deliver earnings per share (EPS) of $3.36. If this prediction holds true, COIN's next yearly EPS will experience a 39.7% decrease compared to the previous year.

Since Coinbase's latest quarterly report on May 2, 2024, the stock price has declined by 6.3%. However, when compared to the previous year, the stock has seen significant growth of 268.9%, outperforming the S&P 500's 25.4% increase during the same period.

Benjamin Budish, the Barclays analyst who revised the price target for COIN, is ranked in the top 5% of Wall Street analysts by WallStreetZen. With an average return of 16.1% and a win rate of 75.8%, Budish specializes in the Technology and Financial Services sectors.

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