Coinbase Reports Mixed Q4, Analysts See Potential for Surprise
Coinbase (COIN) reported its financial results for the final quarter of 2024, with mixed reactions from investors.
Mixed Q4 Earnings
* Shares of the crypto exchange slipped slightly in premarket trading despite better-than-expected earnings.
* Coinbase reported fourth-quarter transaction revenue of $1.55 billion, the highest level since 2021.
* Retail and institutional trading volumes hit three-year highs of $94 billion and $345 billion, respectively.
Regulatory Tailwinds
* Analysts attributed the muted market response to mixed guidance for the first quarter, specifically concerns about increased marketing spend and profit margin pressure.
* However, some analysts believe the muted reaction underestimates the regulatory tailwinds for Coinbase.
* CEO Brian Armstrong highlighted the administration's support for crypto, including efforts to define token classification and regulate stablecoins.
Analyst Ratings and Targets
* Jefferies analyst Trevor Williams reiterated a "Hold" rating with a price target of $300.
* JPMorgan analyst Ken Worthington upgraded the price target to $344 from $264, maintaining a "Neutral" rating.
Conclusion
While Coinbase's Q4 earnings presented a mixed picture, analysts see potential for a positive surprise in the first quarter due to supportive regulatory conditions. However, investors should also consider the company's guidance regarding increased marketing spend and its impact on profit margins.