Coinbase Q4 Results And Guidance 'Encouraging' But Regulatory Risks Remain: Why Analysts Are Mixed On Ratings, Price Targets

Zinger Key Points
  • Needham analyst John Todaro has a Buy rating on Coinbase and a price target of $73.
  • JMP Securities analyst Devin Ryan highlighted the company’s push for positive EBITDA.

Cryptocurrency platform Coinbase Global COIN reported fourth-quarter financial results after market close Tuesday. Analysts are weighing in on the most important metrics from the report and the company’s outlook for 2023.

The Coinbase Analysts: Raymond James analyst Patrick O’Shaughnessy has an Underperform rating and no price target.

Oppenheimer analyst Owen Lau has an Outperform rating and raises the price target from $72 to $84.

JMP Securities analyst Devin Ryan has a Market Outperform rating and a price target of $80.

Needham analyst John Todaro has a Buy rating and a price target of $73.

KeyBanc analyst Alex Markgraff has a Sector Weight rating and no price target.

Related Link: Trading Strategies For Coinbase Stock Before And After Q4 Earnings 

Raymond James Takeaways: O’Shaughnessy said Coinbase’s earnings showed a “meaningfully softer backdrop” for the cryptocurrency industry, impacting their transaction revenues and profitability.

“Coinbase is also enjoying the upside of interest income in a higher rate environment and, as a result, we now believe positive EBITDA in 2023 is a distinct possibility,” O’Shaughnessy said.

The analyst is cautious about the long-term view for Coinbase, with “significant regulatory risks” ahead that could cause retail “pricing compression.”

The bright spot for the analyst was the subscription and services revenue for Coinbase, with a 33% increase year-over-year.

Oppenheimer Takeaways: Lau said Coinbase showed a path to diversification and efforts to generate positive adjusted EBITDA.


“Based on the trading volume trend YTD, interest income projection and sentiment of digital assets, we believe COIN continues to show the path of diversification and be adjusted EBITDA profitable,” Lau said. “We believe there’s an increasing number of new institutional investors getting into this space potentially buying the dip, which could eventually drive more retail engagement.”

The analyst said the fourth quarter results from Coinbase were better than expected and the company’s outlook is “encouraging.”

Regarding the uncertainty of regulatory risks for Coinbase, the analyst said this remains a “headline risk” for the company and the entire cryptocurrency industry.

“CEO [Brian] Armstrong believes that regulatory scrutiny will be good for crypto longer term because it will weed out bad actors and ultimately benefit COIN.”

JMP Securities Takeaways: Ryan said the quarterly results from Coinbase were better than expected, with subscription and services growth leading the way. The analyst also highlighted the company’s push for positive EBITDA.

“Profitability focus a notable shift as Coinbase ready to defend its business model,” Ryan said.

The two key takeaways for the analyst with respect to the company’s outlook were the focus on adjusted EBITDA profitability and the company’s confidence in “compliance-focused” regulatory uncertainty.

The analyst also said there could be some acquisitions made by Coinbase given its size in the space.

“Management noted an uptick in M&A deal flow, and while we are confident it will remain disciplined, we believe the company is well positioned for opportunistic acquisitions and new partnerships.”

The analyst sees Coinbase being a leading voice around regulatory policy for the cryptocurrency sector.

Needham Takeaways: Todaro said Coinbase beat EPS estimates thanks to interest income from USDC.

The analyst said Coinbase is focusing on managing expenses and expects higher trading volume in 2023. The concern for the analyst is the regulatory risks around staking and interest incomes for cryptocurrency companies like Coinbase.

“We expect Coinbase to grow its trading revenue as the market-leading, fiat-crypto on-ramp in the quickly growing crypto ecosystem,” Todaro said.

KeyBanc Takeaways: Markgraff said subscription and services revenue led by interest income helped the fourth quarter results for Coinbase.

“We expect focus items for the upcoming earnings call to be around recent regulatory enforcement actions/propositions, subscription and services visibility and opex/profitability expectations as noted in our recent earnings preview,” Markgraff said.

COIN Price Action: Coinbase shares are down 0.92% to $61.50 on Wednesday.

Read Next: Coinbase CEO Brian Armstrong Advocates For Clearer Crypto Regulations In Washington D.C. 

Photo: Coinbase

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Posted In: Analyst ColorPrice TargetReiterationAnalyst RatingsTrading IdeasAlex MarkgraffBrian Armstrongcryptocurrency tradingcryptocurrency trading platformDevin RyanExpert IdeasJMP SecuritiesJohn TodaroKeyBancNeedhamOppenheimerOwen LauPatrick O'ShaughnessyRaymond James
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