Coinbase Reports Q4 Loss Amid Analyst Downgrades
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 hours ago
0mins
Should l Buy COIN?
Source: stocktwits
- Earnings Loss: Coinbase reported a Q4 earnings per share of $0.66, falling short of Wall Street's $1.05 estimate, indicating significant pressure on profitability amid the ongoing 'crypto winter', which has diminished market confidence in its future performance.
- Revenue Decline: The company's revenue fell 22% year-over-year to $1.78 billion, although it was largely in line with Wall Street expectations, this decline reflects the adverse impact of a weak crypto market on Coinbase's business, potentially affecting its market share.
- Analyst Downgrade: Monness Crespi analyst Gus Gala downgraded Coinbase from 'Buy' to 'Sell' with a price target of $120, signaling a pessimistic outlook on its future growth and exacerbating investor concerns about the company's trajectory.
- ARK Investment Increase: Despite the losses, ARK Invest purchased 92,854 shares of Coinbase across three ETFs on Friday, demonstrating confidence in a potential recovery in the crypto market, which may position them favorably for future market rebounds.
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Analyst Views on COIN
Wall Street analysts forecast COIN stock price to rise
25 Analyst Rating
17 Buy
7 Hold
1 Sell
Moderate Buy
Current: 164.320
Low
230.00
Averages
361.63
High
440.00
Current: 164.320
Low
230.00
Averages
361.63
High
440.00
About COIN
Coinbase Global, Inc. is a holding company of Coinbase, Inc. and other subsidiaries. The Company provides a platform that serves as a compliant on-ramp to the onchain economy and enables users to engage in a variety of activities with their crypto assets in both proprietary and third-party product experiences enabled by access to decentralized applications. It offers consumers their primary financial account for the cryptoeconomy; institutions a full-service prime brokerage platform with access to deep pools of liquidity across the crypto marketplace, and developers a suite of products granting access to build onchain. Its platform helps people and institutions to engage with crypto assets, including trading, staking, safekeeping, spending, and global transfers. It offers products and services to various customer groups: individuals, businesses, institutions, and developers. Its transaction products consist of consumer trading, prime Trading, markets, base protocol and Coinbase wallet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Revenue Decline: The company's revenue fell 22% year-over-year to $1.78 billion, although it was largely in line with Wall Street expectations, this decline reflects the adverse impact of a weak crypto market on Coinbase's business, potentially affecting its market share.
- Analyst Downgrade: Monness Crespi analyst Gus Gala downgraded Coinbase from 'Buy' to 'Sell' with a price target of $120, signaling a pessimistic outlook on its future growth and exacerbating investor concerns about the company's trajectory.
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- Everyday Payment Adoption: 27% of stablecoin holders use them for daily transactions, holding an average of $200 in stablecoins, with 52% of crypto holders making purchases specifically because merchants accepted stablecoins, indicating their potential as everyday currency.
- Increased Demand for Acceptance: 77% of consumers expressed interest in opening stablecoin wallets with their primary fintech or banking providers, highlighting that the demand for stablecoins exceeds current spending opportunities, with 42% wanting to use them for major purchases.
- Regional Adoption Disparities: In emerging markets like South America, Asia, and Africa, 60% of crypto natives hold stablecoins, underscoring their importance as tools for stability and financial inclusion, driving mainstream adoption globally.
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- Market Volatility Analysis: Coinbase's Head of Institutional Strategy, John D’Agostino, stated on CNBC that while the market decline appears significant in dollar terms, it represents typical volatility for cryptocurrencies on a percentage basis, indicating that the market is still within normal fluctuation ranges.
- Bitcoin Holdings Situation: Strategy Inc currently holds 717,131 BTC at an average cost of approximately $76,027, while Bitcoin is trading near $68,000, indicating that the company's holdings are underwater; however, CEO Saylor asserts that fears of forced liquidation are “unfounded.”
- Liquidation Risk Assessment: Both Saylor and Strategy CEO Phong Le emphasized that liquidation would only occur if Bitcoin crashed by 90% and remained there for five years, a scenario deemed “extremely unlikely,” showcasing the company's confidence in its assets.
- Coinbase Financial Challenges: D’Agostino's defense comes as Coinbase faces challenges, with the company’s Q4 earnings missing key metrics, prompting Piper Sandler to cut its price target from $270 to $150, reflecting market concerns about Coinbase's future performance.
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- Earnings Loss: Coinbase reported a Q4 earnings per share of $0.66, falling short of Wall Street's $1.05 estimate, indicating significant pressure on profitability amid the ongoing 'crypto winter', which has diminished market confidence in its future performance.
- Revenue Decline: The company's revenue fell 22% year-over-year to $1.78 billion, although it was largely in line with Wall Street expectations, this decline reflects the adverse impact of a weak crypto market on Coinbase's business, potentially affecting its market share.
- Analyst Downgrade: Monness Crespi analyst Gus Gala downgraded Coinbase from 'Buy' to 'Sell' with a price target of $120, signaling a pessimistic outlook on its future growth and exacerbating investor concerns about the company's trajectory.
- ARK Investment Increase: Despite the losses, ARK Invest purchased 92,854 shares of Coinbase across three ETFs on Friday, demonstrating confidence in a potential recovery in the crypto market, which may position them favorably for future market rebounds.
See More
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- Legal Support Action: The CFTC has filed a friend-of-the-court brief in the Ninth U.S. Circuit Court of Appeals supporting Crypto.com, aiming to defend its exclusive jurisdiction over prediction markets, indicating a strong legal stance.
- Industry Function Defense: Selig emphasized that prediction markets provide useful functions in society, helping everyday Americans hedge against commercial risks such as temperature fluctuations and energy price spikes, highlighting their significance in the economy.
- Market Growth Potential: Despite legal challenges, prediction markets are booming, with Kalshi experiencing a 2,700% year-over-year surge in Super Bowl trading volume, exceeding $1 billion in wagers, showcasing the market's immense potential and appeal.
See More
Cathie Wood Discusses Bitcoin's Recent Weakness
- Algorithmic Trading Impact: Cathie Wood argues that Bitcoin's recent weakness reflects algorithmic trading effects rather than deteriorating fundamentals, indicating that market sentiment towards cryptocurrencies remains risk-oriented.
- Bitcoin vs. Gold Comparison: She notes Bitcoin's underperformance relative to gold as a result of systematic algorithm-driven trading models, suggesting skepticism about Bitcoin's value, which could affect its long-term investment appeal.
- Advisory Role at LayerZero: Wood has joined the advisory board of LayerZero, emphasizing the cross-chain protocol's potential in the AI-driven digital economy, capable of handling millions of transactions per second, surpassing existing networks like Ethereum.
- Ark Invest's Crypto Investment: Ark Invest recently invested approximately $18 million in crypto-related equities, including $2 million in Bullish and $12 million in Robinhood, demonstrating ongoing confidence and strategic positioning in the crypto market.
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