Coinbase Management Has Realigned Company's Cost Base To Volatile Trading Environment - This Analyst Says While Raising Expectations

Wedbush analyst Moshe Katri reiterated Coinbase Global, Inc COIN with an Outperform and a $110 price target.

The 3Q revenue and EPS of $674.1 million and ($0.01) beat Street’s expectations of $650.9 billion and ($0.55). Adjusted EBITDA and adjusted EBITDA margin of $181 million and 29.1% compared to FactSet’s estimate of $119.4 million and 18.0%.

COIN reported stronger than expected results, featuring a material profitability improvement, with mixed volume and operating metrics, including outperformance in transaction revenues, including Retail, offset by light performance in Institutions, and outperformance in subscriptions, including Stablecoin, offset by light Blockchain rewards, and Custodial fees. 

As expected, trading volume was light in retail and institutional volumes, and MTU (monthly transacting users) was down Q/Q. Finally, total customer assets were $117.77 billion. 

The analyst also flagged the lack of plans to reduce transaction fees due to ETFs, aim for positive adjusted EBITDA in all market conditions, preparation for IRS proposed regulations on reporting of digital assets, derivatives volume reaching $10 billion in Q3 2023, Base Layer-2 solution seeing over 1 million transacting wallets, pricing experiments possibly including different pricing by coins or geographies.

The analyst projects Q4 revenue of $635 million (prior $610 million) and EPS of $0.00 (prior $0.55).

Price Action: COIN shares are trading higher by 2.43% at $88.47 on the last check Tuesday.