Shares of Coinbase fell after the company’s weaker-than-expected third-quarter earnings, but HC Wainwright analyst Mike Colonese maintains a Buy rating on the stock.
On October 30, Coinbase, the largest publicly traded cryptocurrency exchange, released its third-quarter earnings report, which showed an “unusual revenue miss,” according to Colonese. He noted that this could impact the company’s shares in the short term.
However, despite the lack of revenue, largely due to crypto prices falling during the quarter, the overall view is that this is a strong third quarter of 2024.
Notably, aspects such as expense control and income diversification are positive for Coinbase. The next 12 months also offer a bullish outlook for cryptocurrency prices, with regulatory clarity adding to potential upside catalysts.
“We were encouraged to hear management’s positive views on the upcoming elections and their implications for the crypto industry. Specifically, CEO Brian Armstrong believes that the United States will have the “most pro-crypto Congress ever,” regardless of who wins next week’s presidential election. Finally, Coinbase recently launched a billion-dollar share repurchase program, with the company aiming to return capital to shareholders in the future.
Mike Colonese said.
Colonese reiterated a Buy rating for Coinbase, with a price target of $255, up from $295, reflecting the revised 2025 revenue estimate.
HC Wainwright analysts lowered their revenue estimates for Coinbase, forecasting $5.45 billion for 2024 (from $5.67 billion) and $5.37 billion for 2025 (from $6.25 billion) .
Coinbase reported total third-quarter revenue of $1.21 billion, down 17% quarter-over-quarter but up 86% year-over-year, slightly below FactSet estimates of $1.26 billion.
Risks to HC Wainwright’s Buy rating and $255 target price will include retail revenue concentration, falling crypto prices, and regulatory uncertainty.
