Coinbase (COIN) Beats Expectations with Q1 2024 Results, Analysts Remain Bullish

Oppenheimer's Owen Lau raised their price target on Coinbase (NASDAQ: COIN) by 2.2% from $276 to $282 on May 3, 2024. The analyst maintained their Buy rating on the stock.

Coinbase, a leading provider of financial infrastructure and technology for the crypto economy, recently reported its Q1 2024 earnings. Lau attributed the company's strong performance to robust trading volume, which saw a significant increase both quarter-over-quarter and year-over-year.

For Q1 2024, Coinbase reported impressive financial results. The company's earnings per share (EPS) of $1.65 exceeded the Zacks Consensus Estimate of $1.04 and Q1 2023's $0.15. Additionally, Coinbase generated revenue of $1.64 billion, beating the Zacks Consensus Estimate by 29.55% and surpassing Q1 2023's $772.53 million. The company's adjusted EBITDA for the quarter stood at $1.014 billion, a substantial increase from Q1 2023's $287 million.

Looking ahead to Q2 2024, Coinbase's management provided guidance. They expect transaction and services revenue to be within a range of $525 million to $600 million, assuming cryptocurrency prices remain stable. The company also anticipates transaction expenses to account for a mid-teens percentage of net revenue. Technology and development, general and administrative expenses are projected to range between $660 million and $710 million, driven by elevated expenses associated with higher trading volumes. Sales and marketing expenses are expected to be between $150 million and $180 million, primarily due to higher USDC customer rewards and increased NBA spending.

In a Letter to Shareholders, Coinbase's management highlighted their focused execution on product expansion, operational discipline, and favorable crypto market conditions. They emphasized the company's financial achievements, including $1.6 billion in total revenue and $1.2 billion in net income for Q1 2024. The management team also highlighted their progress in driving revenue, utility, and regulatory clarity, as well as the growth of Coinbase One and the expansion of their international business through Base, their Layer 2 solution.

Following the release of Coinbase's Q1 2024 earnings, other analysts provided updated ratings and price targets for the stock. Goldman Sachs analyst Will Nance lowered their price target by 13.6% to $255 but maintained a Hold rating. Keefe, Bruyette & Woods analyst Kyle Voigt raised their price target by 4.3% to $240 and also maintained a Hold rating. Canaccord Genuity analyst Joseph Vafi raised their price target by 16.7% to $280 and maintained a Strong Buy rating.

Currently, 54.5% of top-rated analysts rate Coinbase as a Strong Buy or Buy, while 36.4% consider it a Hold. Only 9.1% recommend or strongly recommend selling the stock.

The consensus forecast among analysts predicts that Coinbase's upcoming year will deliver earnings per share (EPS) of $3.36. If the analysts' projections hold true, this would represent a 39.7% decrease in EPS on a year-over-year basis.

Since the release of Coinbase's latest quarterly report on May 2, 2024, the company's stock price has declined by 6.3%. However, on a year-over-year basis, the stock has surged by an impressive 268.9%. During this period, Coinbase has outperformed the S&P 500, which has seen a 25.4% increase.

Oppenheimer analyst Owen Lau, who raised the price target on Coinbase, is ranked in the top 12% of Wall Street analysts by WallStreetZen. Lau specializes in the Industrials, Technology, and Financial Services sectors and has an average return of 8.1% with a win rate of 60.6%.

Coinbase Global, Inc., founded in 2012 and based in Wilmington, DE, provides financial infrastructure and technology for the crypto economy. The company offers primary financial accounts for retailers in the crypto economy, a marketplace with liquidity for institutions to transact in crypto assets, and technology and services that enable ecosystem partners to build crypto-based applications and accept crypto assets as payment.

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