Coinbase Bulls in Action: Q4 Expectations Rise with Market Rally

Sahana Kiran
Source – CNBC

The shares in the prominent cryptocurrency exchange Coinbase experienced a remarkable surge of 37% over the past week. As anticipation mounts for Coinbase’s upcoming fourth-quarter earnings report, analysts are optimistic about the firm’s performance, especially considering the potential benefits arising from the recent approval of spot Bitcoin exchange-traded funds (ETFs) in the United States.

Analyst Projections and Revenue Boost

Analysts, referencing aggregated data from MarketWatch and FactSet, anticipate a substantial revenue increase for Coinbase in the fourth quarter, with estimates indicating a remarkable 22% rise from the previous quarter, totaling $825 million. Additionally, analysts expect Coinbase to report a minimal loss of 1 cent per share, a significant improvement compared to the loss of $2.46 reported during the same period last year. Despite this positive outlook, it’s worth noting that the firm has occasionally fallen short of earnings per share estimates from analysts in previous quarters.

JPMorgan analyst Kenneth B. Worthington expressed a less enthusiastic view of the initial Bitcoin ETF trading reception, leading to a downgrade of Coinbase shares from Neutral to Underweight, while maintaining a $80 price target.

A significant portion of Coinbase’s projected strong performance is attributed to expected increases in trading volumes. Analysts estimate a nearly doubled trading volume from $76 billion in the third quarter to $142.7 billion in the fourth quarter. Moreover, earnings per share for the fourth quarter are expected to improve to $0.02, a significant uptick from the reported loss of $0.01 per share in the preceding quarter.

John Todaro, an analyst at investment bank Needham, expressed optimism about Coinbase’s prospects, particularly noting the return of trading volumes to the space and the resilience of interest income. Todaro maintains a buy rating on Coinbase stock, anticipating a strong performance in the fourth quarter.

Also Read: Coinbase Says it Has Extensively Prepared for Bitcoin ETF Approval

Coinbase’s Outlook in Sync with Bitcoin’s Surge

The bullish sentiment surrounding Coinbase coincides with a significant increase in the price of Bitcoin, which has surged by 17% in the past seven days. At press time, Bitcoin was trading at $52,078.28 with a daily surge of 4.75%. This upward movement further underscores the positive momentum in the cryptocurrency market, setting the stage for an eagerly anticipated earnings report from Coinbase.

Also Read: Ledger And Coinbase Pay Partner, Simplifying Crypto Transactions

As the cryptocurrency landscape evolves and matures, fueled by milestones such as the approval of Bitcoin ETFs, investors, and industry observers closely monitor the performance of key players like Coinbase, positioned to navigate the opportunities and challenges in this dynamic market.