Compass Point has revised its outlook for Coinbase (COIN, Financial), downgrading the stock from a Buy to a Sell rating. The firm has set a price target of $180 for the cryptocurrency exchange company, citing concerns over its upcoming first-quarter results scheduled for release on May 8. Additionally, there are apprehensions regarding performance in the second half of the year, particularly as growth is anticipated to stem from institutional segments that are characterized by lower margins.
Recent trends have shown a negative reaction to the company's last three earnings announcements, and Compass Point anticipates this pattern might persist. The firm projects that the first-quarter results and ongoing second-quarter commentary could prove to be "disappointing," potentially influencing investors negatively.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 27 analysts, the average target price for Coinbase Global Inc (COIN, Financial) is $282.85 with a high estimate of $400.00 and a low estimate of $169.00. The average target implies an upside of 34.92% from the current price of $209.64. More detailed estimate data can be found on the Coinbase Global Inc (COIN) Forecast page.
Based on the consensus recommendation from 30 brokerage firms, Coinbase Global Inc's (COIN, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Coinbase Global Inc (COIN, Financial) in one year is $186.11, suggesting a downside of 11.22% from the current price of $209.64. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Coinbase Global Inc (COIN) Summary page.
COIN Key Business Developments
Release Date: February 13, 2025
- Total Revenue: More than doubled to $6.6 billion in 2024.
- Adjusted EBITDA: $3.3 billion, marking two consecutive years of positive adjusted EBITDA.
- Subscription and Services Revenue: Increased 64% year-over-year to $2.3 billion.
- International Revenue Share: Reached 19% in Q4 2024.
- Q4 Total Trading Volume: $439 billion, up 137% quarter-over-quarter.
- Consumer Trading Volume: $94 billion, up 176% quarter-over-quarter.
- Consumer Transaction Revenue: $1.3 billion, up 179% quarter-over-quarter.
- Institutional Trading Volume: $345 billion, up 128% quarter-over-quarter.
- Institutional Transaction Revenue: $141 million, up 156% quarter-over-quarter.
- Subscription and Services Revenue (Q4): $641 million, up 15% quarter-over-quarter.
- Net Income: $1.3 billion in Q4, benefiting from $476 million in pretax gains on crypto asset investments.
- USD Resources: Grew to $9.3 billion by the end of Q4 2024.
- Assets on Platform: $404 billion as of December 31, 2024.
- Q1 2025 Transaction Revenue: Approximately $750 million year-to-date.
- Q1 2025 Subscription and Services Revenue Outlook: Expected to be between $685 million and $765 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Coinbase Global Inc (COIN, Financial) reported a significant increase in total revenue for 2024, more than doubling to $6.6 billion.
- The company achieved $3.3 billion in adjusted EBITDA, marking two consecutive years of positive adjusted EBITDA.
- Subscription and services revenue grew by 64% year-over-year to $2.3 billion, driven by USDC, staking, and Coinbase One.
- Coinbase Global Inc (COIN) reached an all-time high for both US spot and global derivatives market share in Q4.
- The company is well-positioned to capitalize on new regulatory tailwinds, enhancing its long-term strategy to be the most trusted and compliant platform.
Negative Points
- The lower interest rate environment and the impact of new USDC ecosystem participants led to a decline in stablecoin revenue by 9%.
- Operating expenses increased by 19% in Q4, driven by higher transaction expenses and increased marketing spend.
- Despite the strong quarter, the company faces challenges in maintaining its market share amidst increasing competition from other platforms.
- The rapid increase in the number of tokens being created presents a challenge for Coinbase Global Inc (COIN) in managing its listing process.
- The company needs to balance consumer protection with providing access to a broad range of assets, which could complicate its product offerings.
