On Tuesday, H.C. Wainwright updated its outlook on Coinbase (NASDAQ:COIN) Global Inc. (NASDAQ:COIN), raising the price target to $250 from the previous $115 while maintaining a Buy rating on the stock. The revision follows Coinbase's announcement of strong fourth-quarter and full-year 2023 financial results, which surpassed consensus estimates for both revenue and earnings. The company reported a fourth-quarter earnings per share (EPS) profit of $1.04, marking its first quarterly profit since the peak of the last cryptocurrency bull market in the fourth quarter of 2021.
Coinbase also provided revenue guidance for the first quarter of 2024 that exceeded consensus forecasts. The positive outlook is attributed to robust trends across various trading categories, including simple, advanced, and institutional trading. Additionally, the continued rally in cryptocurrency asset prices has been favorable for the company.
For the year 2023, Coinbase generated $3.1 billion in total revenues, a slight decrease of 3% year-over-year. However, the company notably reduced operating expenses by 45% compared to the previous year. Coinbase also achieved $964 million in adjusted EBITDA and $95 million in net income. Noteworthy is the fact that the company posted positive adjusted EBITDA in every quarter of 2023, despite challenging market conditions characterized by generally low crypto trading volumes.
Throughout 2023, Coinbase launched several new products, with derivatives being a significant addition, considering they represent 75% of global crypto trading volumes. The company also expanded into six new markets, positioning itself to increase market share in the future. The launch of spot Bitcoin ETFs in the United States on January 11, 2024, has been a net positive for Coinbase.
Looking forward, H.C. Wainwright expressed a bullish stance on cryptocurrency asset prices and trading volumes for 2024. The firm anticipates that the upcoming Bitcoin halving in April 2024, along with increased demand and inflows from spot ETFs, will serve as significant catalysts for growth. The firm expects Coinbase to continue expanding its global market share and maintain its leading position as a cryptocurrency exchange in the U.S.
InvestingPro Insights
As Coinbase Global Inc. (NASDAQ:COIN) continues to make headlines with its recent financial success and optimistic revenue guidance, investors are closely monitoring the company's performance metrics. According to InvestingPro data, Coinbase boasts a robust market capitalization of $43.68 billion, reflecting investor confidence in its market position. Despite a slight revenue decline of 7.08% in the last twelve months as of Q4 2023, the company's gross profit margin remains impressively high at 85.62%, underscoring its ability to maintain profitability in a competitive space.
However, the company's P/E ratio stands at a towering 484.1, suggesting that the stock is trading at a high earnings multiple. This is further emphasized by a Price / Book ratio of 6.95, indicating that the market currently values the company significantly above its book value. These metrics could be of interest to investors who weigh market sentiment and valuation heavily in their investment decisions.
InvestingPro Tips highlight a significant return over the last week with a 28.44% price total return, as well as a strong return over the last three months at 69.94%. This points to recent positive momentum in the stock's performance, which may attract investors looking for growth opportunities. For those considering a deeper dive into Coinbase's metrics and seeking additional insights, InvestingPro offers a total of 13 InvestingPro Tips for COIN, which can be explored further at https://www.investing.com/pro/COIN. To enhance your investing strategy with these insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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