COIN a Buy despite Q3 revenue miss, analyst says

Coinbase shares fell after the company’s weaker-than-expected third-quarter earnings, but HC Wainwright analyst Mike Colonese maintains a buy rating on the stock.

Coinbase, the largest publicly traded crypto exchange, released its third-quarter earnings report on Oct. 30, which showed “an unusual loss of revenue,” according to Colonese. He stated that this could affect the company’s shares in the short term.

However, despite the loss of revenue largely due to lower crypto prices in the quarter, the general consensus is that this was a solid third quarter of 2024.

In particular, issues such as spending controls and income diversification are on the positive side for Coinbase. The next 12 months also present a bullish outlook for crypto prices, with regulatory clarity increasing potential upside catalysts.

“We were encouraged to hear the administration’s positive views on the upcoming election and its impact on the crypto industry. CEO Brian Armstrong, in particular, believes that whoever wins next week’s presidential election, the US will have the “most pro-crypto Congress ever.” Finally, Coinbase recently launched a $1 billion share repurchase program as the company aims to return capital to shareholders in the future.”

Mike Colonese said.

Colonese reiterated his price target, downgrading his buy rating on Coinbase to $255 from $295, reflecting his revised revenue forecast for 2025.

HC Wainwright analysts have lowered their revenue estimates for Coinbase, predicting $5.45 billion (from $5.67 billion) in 2024 and $5.37 billion (from $6.25 billion) in 2025.

Coinbase reported total revenue of $1.21 billion in the third quarter; That’s down 17% quarter-over-quarter and up 86% year-over-year, just below FactSet’s $1.26 billion forecast.

Risks to HC Wainwright’s Buy rating and $255 target price will include retail trading revenue concentration, crypto price decline, and regulatory uncertainty.