Wall Street Projects 48% Decline In Coinbase Q1 EPS Despite Bull Run

As Coinbase Global Inc.’s (COIN) latest quarterly earnings report inches closer, Wall Street analysts have offered their projections for the cryptocurrency exchange platform. Despite the ongoing bull run in the crypto market, expectations for the Coinbase Q1 2024 report indicate a stark 48% decline in GAAP earnings per share (EPS) compared to the previous quarter.

Coinbase GAAP EPS To Decline 48%

Analysts foresee Q1 FY24 EPS for Coinbase to stand at $0.54, down from $1.04 in Q4 FY23. This indicates a massive decline of over 48% quarter-over-quarter. Netizens have questioned the Wall Street estimates since the first quarter of FY24 witnessed a gigantic bull run that even led to Coinbase’s servers crashing.

Looking ahead, forecasts for Coinbase’s performance reveal a mixed outlook. Revenue growth is expected to maintain momentum, with a projected 54% year-over-year (YoY) increase in 2024, followed by a more modest 0.5% growth in 2025. Meanwhile, EBITDA (earnings before interest, taxes, depreciation, and amortization) is anticipated to surge by an impressive 120% YoY in 2024, but then face a 10% decline in 2025.

Furthermore, the situation becomes more nuanced when examining net income growth projections. Analysts anticipate an extraordinary 300% YoY surge in 2024 for Coinbase’s net income. However, they forecasted a subsequent 36% decline in 2025, which could signal at a potential end of the ongoing bull market.

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Earnings History & Outlook

Coinbase, in contrast to a $557 million loss a year prior, reported a profit of $273.4 million for the three months ending December 31. Analysts, as per LSEG data, had anticipated a loss of $0.1 per share. However, the surge in interest in cryptocurrencies prompted Coinbase Global to unveil a new chapter on Thursday, marking its first quarterly profit since 2021, fueled by strong trading volumes.

The firm also recorded a notable 64% surge in transaction revenue to $529.3 million during the same period. The stronger-than-expected outcome propelled the company’s shares upward the day after the announcement. The Coinbase stock soared nearly 15% in the pre-market session that day. Additionally, Coinbase revealed that its subscription and services division, encompassing activities beyond trading.

Moreover, the crypto exchange provided an optimistic outlook for a successful first quarter this year. It forecasted sales for the segment to range between $410 million and $480 million, surpassing the LSEG estimate of $356.22 million.

However, a noteworthy aspect of the results was the decline in Coinbase’s transaction revenue to $1.5 billion in 2023, marking a 36% year-on-year decrease. Moreover, total trading volume plummeted nearly 44% compared to the previous year, standing at $468 billion.

Also Read: Coinbase Data Signals Institutional Investors Buying Bitcoin Again