Coinbase (COIN) Receives Price Target Increase and Buy Rating from Wedbush Analyst

Wedbush's Moshe Katri raised their price target on Coinbase (NASDAQ: COIN) by 25% from $200 to $250 on 2024/05/03. The analyst maintained their Buy rating on the stock.

This comes after Coinbase reported its Q1 2024 earnings on May 2, which impressed Katri. The analyst described both the results and management's Q2 FY 2024 guidance as strong. One of the highlights of the earnings report was the EBITDA of over $1 billion, which Katri called a "huge beat." According to the analyst, this figure essentially exceeded the total earnings of 2023, highlighting the earnings power of the Coinbase model.

In more detail, Coinbase reported EPS of $1.65 for Q1 2024, beating the Zacks Consensus Estimate of $1.04 and Q1 2023's $0.15. Revenue for the quarter stood at $1.64 billion, surpassing the Zacks Consensus Estimate by 29.55% and Q1 2023's $772.53 million. Adjusted EBITDA came in at $1.014 billion, a significant increase from Q1 2023's $287 million.

Looking ahead to Q2 2024, Coinbase management provided guidance based on certain assumptions. They expect Q2 subscription and services revenue to be within a range of $525 million to $600 million if crypto asset prices remain in the range observed so far this year. Transaction expenses are projected to be in the mid-teens as a percentage of net revenue, while technology & development and general & administrative expenses are estimated to be between $660 million and $710 million. Sales & marketing expenses are expected to range from $150 million to $180 million.

In their Letter to Shareholders, Coinbase management expressed satisfaction with the company's financial performance in Q1, attributing it to focused execution on product expansion, operational discipline, and favorable crypto market conditions. They highlighted achievements such as increased market share in US spot and derivatives, reaching all-time highs on Coinbase Prime, and an increase in USDC market capitalization. The adoption of Coinbase One remains strong, and the international business has contributed significantly to growth. Coinbase's Layer 2 solution, Base, aims to improve the infrastructure of the crypto ecosystem and enhance network speed and stability.

Regarding regulatory clarity, Coinbase continues to drive advocacy efforts, push for legislation, and seek clarity through the courts. The company remains dedicated to its mission of increasing economic freedom worldwide.

In addition to Wedbush's Moshe Katri, other analysts have also updated their ratings on COIN on May 3, 2024:

- Goldman Sachs's Will Nance lowered their price target from $295 to $255 and maintained a Hold rating on the stock. - Keefe, Bruyette & Woods's Kyle Voigt raised their price target from $230 to $240 and maintained a Hold rating on the stock. - Canaccord Genuity's Joseph Vafi raised their price target from $240 to $280 and maintained a Strong Buy rating on the stock.

Currently, 54.5% of top-rated analysts rate COIN as a Strong Buy or Buy, 36.4% see it as a Hold, and 9.1% either recommend or strongly recommend selling the stock.

According to the consensus forecast among analysts, COIN is expected to deliver earnings per share (EPS) of $3.36 for the upcoming year. If these predictions hold true, COIN's next yearly EPS will be down by 39.7% compared to the previous year.

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

Wedbush analyst Moshe Katri is ranked in the top 16% of Wall Street analysts by WallStreetZen, with an average return of 6.2% and a 56% win rate. Their expertise lies in the Technology, Financial Services, and Industrials sectors.

Coinbase Global, Inc. is a leading provider of financial infrastructure and technology for the crypto economy. The company offers primary financial accounts for retailers in the crypto economy, a marketplace for institutions to transact in crypto assets, and technology and services to enable partners to build crypto-based applications and accept crypto assets as payment. Founded in 2012, Coinbase Global is headquartered in Wilmington, DE.

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