Coinbase’s Earnings: A Rollercoaster Ride You Won’t Want to Miss! 🎢💰

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What to know:

  • Well, folks, it seems Coinbase (COIN) is fixin’ to report a revenue of $1.8 billion for the fourth quarter of 2024, just after the clock strikes close on Thursday. Ain’t that a hoot?
  • Wall Street wizards reckon this crypto exchange has seen its trading volumes soar higher than a kite in a windstorm since the fourth quarter of 2021. 🎈
  • As for 2025, the crystal ball shows volumes normalizing, but analysts predict it’ll be a “highly formative” year for Coinbase as it tries to diversify its revenue streams like a squirrel hoarding nuts for winter.

Now, if you thought the fourth quarter was a good’un for crypto, you ain’t seen nothin’ yet! Wall Street analysts are all a-twitter, expectin’ Coinbase to have posted a mighty jump in earnings from the previous three months.

Revenue for the fourth quarter is expected to have been $1.8 billion, according to FactSet, up from a measly $1.26 billion in the third quarter. Earnings-per-share are estimated to have risen to $1.99 from a paltry $0.41. Talk about a glow-up!

But hold your horses! Thanks to the ruckus caused by Donald Trump’s presidential election victory, analysts expect exchange volume to have shot up to $195.9 billion in the last three months of the year, up from $185.3 billion in the third quarter. That $195.9 billion figure would be the strongest quarterly result since the fourth quarter of 2021. Who knew politics could be so profitable? 🤷‍♂️

“We maintain our bullish thesis on COIN,” the analysts at Citi bank scribbled in their notes, “seeing the company well positioned to benefit as crypto begins a potential transition into a new era.” Sounds fancy, don’t it?

The bank has slapped a buy rating on the stock and this week upped its price target to $350 from $275. Shares on Tuesday are trading at $270, which is nearly 90% higher than this time last year. But don’t get too excited, as the Citi team expects Coinbase to report fourth quarter revenue of $1.7 billion, which is a smidge below the $1.8 billion consensus estimate. Ain’t that just the way? 😅

Now, the November election was a “monumental catalyst for the crypto ecosystem,” wrote JPMorgan’s Ken Worthington, who, despite the excitement, remains neutral on the shares. He sees fourth quarter revenue at $1.77 billion, also a miss from the $1.8 billion estimate. It’s like waiting for a pie to cool, only to find it’s still too hot to eat!

Outlook on 2025

While the final months of 2024 had more catalysts than a science fair, 2025 is a bit of a wild card, as policy changes usually take their sweet time to kick in, say some Wall Street analysts.

“For [2025], we assume static crypto prices and factor more normalized volumes resulting in 6% YoY transaction revenue growth vs. consensus of 3% growth,” Citi said, sounding all smart and stuff.

“Not unlike in the past, we expect the stock to remain as a ‘risk-on’ play throughout 2025 and will likely remain volatile around macro developments and swings in market sentiment,” they continued. “That being said, we expect the next 1-2 years to be highly formative for Coinbase’s business model/competitive strategy, as well as for the greater digital asset space.” Sounds like a fancy way of saying, “Hold on to your hats!”

One of Coinbase’s main priorities over the past year has been to diversify its revenue stream, with 50% still comin’ from trading fees. Retail traders, who pay the highest fees, still haven’t returned to the same levels seen in 2021, according to research firm Kaiko. The share of volume from that clientele shrank to just 18%, down from 40% in 2021, which continues to weigh on transaction revenue like a heavy sack of

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2025-02-12 18:42