On Thursday, B.Riley maintained its Neutral rating on Coinbase (NASDAQ:COIN) Global Inc. (NASDAQ: COIN) stock with a steady price target of $185.00. The firm's assessment followed Coinbase's recent earnings report, which revealed a quarter that aligned with general expectations but showed signs of deceleration. Coinbase's management highlighted challenging market conditions and lower interest rates as factors contributing to the company's slower growth.
Coinbase reported total revenue of $1.2 billion, falling short of B.Riley's anticipated $1.3 billion. Although revenue increased by 79% year-over-year, it marked a 17% decrease from the second quarter. The company's adjusted EBITDA was reported at $449 million, a significant 152% increase year-over-year, but a decline from $596 million in the previous quarter. Despite the revenue shortfall, Coinbase's effective cost management resulted in an adjusted EBITDA that slightly exceeded B.Riley's estimate of $434 million.
B.Riley indicated that it expects Coinbase shares to remain range-bound in the near term. The firm pointed to the upcoming election and the need for regulatory clarity as factors that could influence the stock's performance. Additionally, B.Riley suggested that the emergence of strong, company-specific catalysts could be necessary to provide visibility into more consistent profit growth for Coinbase.
The firm concluded its commentary by stating that it is maintaining its Neutral rating on Coinbase shares for the time being. Furthermore, B.Riley mentioned that its estimates for the company are currently under review, suggesting that adjustments may be made based on the latest financial results and market conditions.
In other recent news, Coinbase Global , the world's largest cryptocurrency exchange, reported significant profit in the third quarter due to a surge in trading volumes. The company's total transaction revenue nearly doubled to $572.5 million, contributing to total revenue of $1.21 billion for the quarter, a notable increase from $674.15 million in the same period last year. Net income attributable to shareholders was reported at $75.46 million, marking a turnaround from a loss in the same quarter the previous year.
Coinbase's trading volumes jumped to $185 billion in the third quarter, up from $76 billion, bolstered by the volatility of the crypto markets and recent regulatory approvals. Analysts from H.C. Wainwright maintained their Buy rating for Coinbase stock, expressing confidence in the company's solid third-quarter earnings. However, other firms such as B.Riley and US Tiger Securities have suggested that the company's stock might remain range-bound due to the anticipation of the upcoming U.S. presidential election and a need for further regulatory clarity.
Coinbase also highlighted the importance of the 2024 elections for the cryptocurrency industry's regulatory landscape. The company is currently challenging the Securities and Exchange Commission in a federal appeals court, seeking clarity on when a digital asset is considered a security. Additionally, Coinbase announced plans to remove select stablecoins in the European Economic Area by the end of the year, aligning with upcoming Markets in Crypto-Assets regulation.
InvestingPro Insights
Coinbase Global Inc. (NASDAQ: COIN) continues to navigate a complex market environment, as reflected in B.Riley's recent analysis. InvestingPro data provides additional context to the company's financial performance and market position.
Despite the challenges noted in the earnings report, InvestingPro Tips suggest that Coinbase's net income is expected to grow this year, and analysts anticipate sales growth in the current year. This aligns with the company's reported 79% year-over-year revenue increase, even as quarterly growth slowed.
The company's financial metrics paint a picture of strong profitability amidst volatility. Coinbase boasts an impressive gross profit margin of 86.1% for the last twelve months as of Q2 2024, with an operating income margin of 27.09%. These figures underscore the company's ability to maintain profitability despite market fluctuations.
Investors should note that Coinbase stock has demonstrated high volatility, with a remarkable 174.56% price return over the past year. This volatility is consistent with the InvestingPro Tip indicating that the stock generally trades with high price volatility.
For those seeking a deeper understanding of Coinbase's financial health and market potential, InvestingPro offers 12 additional tips, providing a comprehensive view of the company's prospects in this dynamic sector.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.