To The Moon

$Coinbase Global, Inc.(COIN)$ will be reporting their quarterly results on 13 Feb after market close for the period ending 31 Dec 2024.

COIN is expected to report a 92.0% increase in revenue to $1.832 billion from $953.8 million a year ago, according to the mean estimate from 16 analysts, based on LSEG data. (Sales majority basis is on Total Revenue).

For the earnings per share, COIN is expected to post $1.61 which is more than 50% compared to the same period last year.

Coinbase (COIN) Last Positive Earnings Call Helped COIN TO A 26.05% Change To Its Share Price

COIN saw a change of 26.05% since its last positive earnings call on 30 Oct 2024, which the earnings call reflects a positive sentiment overall, with Coinbase demonstrating strong financial performance, significant growth in subscription and services revenue, and successful international expansion.

However, challenges such as a decline in trading volume and impact from lower interest rates were noted. Regulatory achievements and a strong balance sheet provide a foundation for future growth.

Coinbase (COIN) Guidance For Higher Stablecoin Transactions Needed

In the Coinbase Q3 2024 earnings call, several key financial metrics and guidance highlights were discussed. The company achieved its seventh consecutive quarter of positive adjusted EBITDA and fourth consecutive quarter of positive net income, with Q3 total revenue at $1.2 billion and adjusted EBITDA at $449 million. Subscription and services revenue is projected to exceed $2 billion in 2024, up from $1.4 billion in 2023.

Coinbase's balance sheet strengthened, with total USD resources growing by 5% quarter-over-quarter, reaching $8.2 billion. The company also announced a $1 billion stock buyback authorization, highlighting its strategic capital allocation plans. Additionally, Coinbase's performance in driving utility included significant growth in stablecoin transactions, reaching over $20 trillion in volume for 2024, and expanding its market cap for USDC to $36 billion in Q3.

Coinbase (COIN) Stronger Subscription And Services To Be Seen

In the third-quarter, Coinbase reported its seventh consecutive quarter of positive adjusted EBITDA and fourth consecutive quarter of positive net income, with total revenue of $1.2 billion.

This could continue as COIN transaction volume is poised to grow stronger. The subscription and services revenue was expected to be on pace to exceed $2 billion in 2024, up from $1.4 billion in 2023. This could be possible with Q4 but we should be seeing an improvement of the trading volume and transaction revenue which COIN total trading volume was $185 billion, down 18% quarter-over-quarter, leading to a 27% decline in transaction revenue due to lower crypto asset volatility and average asset prices.

USD Resources Growing Due To Strong Balance Sheet

Coinbase's balance sheet strengthened with total USD resources growing 5% quarter-over-quarter to $8.2 billion. This should continue to grow as COIN subscription and transaction volume should give higher volume and revenue.

This might be impacted by the challenges to COIN non-trading consumer transaction revenue, in third-quarter, we saw a decrease in non-trading consumer transaction revenue, including revenue from DEXs and miner fees, impacted overall financial performance. This might improve slightly but remain a challenge.

COIN To Benefit From No Rate Cut

The third-quarter subscription and services revenue was down 7% quarter-over-quarter, influenced by lower average crypto asset prices and interest rates. But the pause of further rate cut should help to improve COIN subscription and services revenue.

International Expansion Success

Investments in international markets have resulted in revenues exceeding direct operating costs, demonstrating a repeatable expansion playbook. We should be seeing results coming from the international market as Bitcoin have a good run in 2024, and the transaction volume and activity should be significant.

Trump Executive Order To Further Improve Regulatory Achievements

Progress in regulatory clarity with 350 politicians adopting pro-crypto stances and significant bipartisan support for pro-crypto legislation in the U.S. House. With the Trump executive on regulating crypto, this should be able to benefit COIN in their business.

Technical Analysis - Exponential Moving Average (EMA)

Although we have seen Bitcoin and some of the stablecoins hovering with some gains and then losing some, COIN have been pretty volatile in its share price.

We can see that COIN is currently below the 50-day EMA, and it has not been able to defend the 26-EMA as well, so we are seeing Bitcoin hovering around $95,000 to $97,000, this does not bore well for COIN.

So we need to see COIN providing a strong outlook guidance and with a stronger subscription and services revenue to break out of the 26-EMA then 50-EMA.

But this makes COIN a good candidate to buy in if investors have confidence on COIN earnings coming up on 13 Feb after market close.

Summary

I would think COIN could give a better-than-expected earnings because of the fourth-quarter Bitcoin and some stablecoin price growth, this should give an increase in transactions hence more revenue for COIN.

But we need to be aware of how COIN share price have been moving recently, we need an earnings surprise to turn the tide or trend around. I will be watching and see if we can take a position.

Appreciate if you could share your thoughts in the comment section whether you think COIN could provide an earnings surprise.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.