Benzinga - by Priya Nigam, Benzinga Staff Writer.
Shares of Coinbase Global Inc (NASDAQ:COIN) tanked in early trading on Friday, despite the company reporting a revenue beat for the first quarter.
The results came amid an exciting earnings season. Here are some key analyst takeaways from the release.
- JPMorgan analyst Kenneth Worthington maintained a Neutral rating, while raising the price target from $150 to $175.
- Canaccord Genuity analyst Joseph Vafi reaffirmed a Buy rating, while lifting the price target from $240 to $280.
- Needham analyst John Todaro reiterated a Buy rating, while reducing the price target from $275 to $260.
- HC Wainwright analyst Mike Colonnese maintained a Buy rating, while raising the price target from $300 to $315.
- Oppenheimer analyst Owen Lau reaffirmed an Outperform rating, while lifting the price target from $276 to $282.
- Wedbush analyst Moshe Katri maintained an Outperform rating, while raising the price target from $200 to $250.
- JMP Securities analyst Devin Ryan reiterated a Market Outperform rating and price target of $320.
JPMorgan: Coinbase reported its first-quarter adjusted earnings of $4.40 per share, ex-crypto investment gains, significantly beating the Street expectations, Worthington said in a note. Total revenues grew 112% year-on-year, with total opex declining -2%, he added.
"It was a solid trading environment for Coinbase in 1Q24 as much of the cryptoecosystem saw significant price appreciation amid key catalysts like distribution innovation (via the spot Bitcoin ETFs) and protocol improvements (like Ethereum's Dencun)," the analyst wrote. He added, however, that the trends seem to have reversed, decelerating so far in the second quarter.
Canaccord Genuity: Coinbase’s performance in the first quarter "underscores the company’s aggressive and yet thoughtful approach to garnering broader market share in good and less good crypto market environments," Vafi wrote in a note.
The company adhering to regulations is "paying dividends, with many of the US spot ETF players now using the company as their custodian," the analyst said. Coinbase's model has earnings power, which is being combined with "material cost reductions to the operating model over the last six quarters," he added.
Needham: Coinbase "handily" beat expectations in the first quarter, Todaro said. Revenues of $1.64 billion came in ahead of Street's $1.36 billion, while earnings were $1.96 per share, higher than consensus $1.15 per share, he added.
"In our view COIN is doing almost everything right," the analyst wrote. "The company has managed to keep expenses low, while delivering on derivs, Base chain, ETF trading/custody and an int’l offering.”
HC Wainwright: "Coinbase delivered another strong revenue and earnings beat," Colonnese said. Total trading volumes more than doubled sequentially, while both retail and institutional take rates rose in the quarter, driving over $1 billion in total transaction revenues for the first time since the first quarter of 2022, he added.
This combined with subscription and services revenues resulted in a "whopping 20% revenue beat," the analyst stated. "Meanwhile, Coinbase generated more adjusted EBITDA in the quarter than the company did for the full year in 2023 ($1B in 1Q vs. $950M in 2023), demonstrating the strong operating leverage of the business," he further wrote.
Oppenheimer: Coinbase delivered a beat on both the top- and bottom-line, driven by trading volume growth of over 100% sequentially and on a year-on-year basis, Lau said. "Subscription & services revenue was strong, and its 2Q guidance was even better," he added.
The market cap of USDC has risen by $800 million to $33.2 billion from March to May, the analyst stated. "We believe there are catalysts (e.g. further adoption, stablecoin bill, Base, derivative, international expansion) that can support the stock," he further wrote.
Wedbush: Coinbase is growing globally, becoming the "first and largest" crypto exchange in Canada, adding 15 new features to its International Exchange, and covering around 80% of the estimated volume of total futures globally in the first quarter, Katri said.
Coinbase generated more than $300 million in total transaction revenue during April, the analyst stated. He added that subscription and services revenue growth could be between $525 million and $600 million in the second quarter.
JMP Securities: Coinbase delivered a "blowout quarter," benefiting from an improving environment and diversification efforts, Ryan said. Despite high expectations, "we were pleasantly surprised by results on balance," he added.
"While growth from here will not be linear, we think it is becoming more evident to the market that Coinbase is building one of the most holistic on ramps into the digital asset economy, and for virtually all user types," the analyst further wrote.
COIN Price Action: Shares of Coinbase Global had declined by 3.68% to $220.42 at the time of publication on Friday.
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