The fourth quarter was good for crypto-, and Wall Street analysts expect it led the US Exchange Coinbase (Coin) to send a big leap in earnings from the previous three months.
The fourth quarter turnover is expected to have been $ 1.8 billion, according to Factset, up from $ 1.26 billion in the third quarter. Earnings per Share is estimated to have risen to $ 1.99 from $ 0.41.
Perhaps more importantly, thanks to the big rally across crypto after Donald Trump’s presidential election victory, analysts expect the exchange volume to rose to $ 195.9 billion in the last three months of the year from $ 185.3 billion in the third quarter. This $ 195.9 billion number would be the strongest quarterly result since the fourth quarter of 2021.
“We maintain our bullish thesis about coin when we see the company well positioned to take advantage as crypto begins a potential transition to a new era,” analysts in Citi Bank wrote in a note.
The bank has a purchase rating on the stock and this week increased its price target to $ 350 from $ 275. Shares on Tuesday are trading with $ 270, ahead of nearly 90% from the previous year. However, the CITI team expects Coinbase to report on a $ 1.7 billion turnover of $ 1.8 billion in the fourth -quarter of $ 1.7 billion.
The November election was a “monumental catalyst for the crypto ecosystem,” wrote JPMorgan’s Ken Worthington, who nevertheless remains neutral on the shares. He sees revenue in the fourth quarter to $ 1.77 billion, also a $ 1.8 billion estimate miss.
Outlook on 2025
While the last months of 2024 had many catalysts for crypto and thus coinbase, 2025 is difficult to predict, as political changes typically take some time to take effect, some Wall Street analysts say.
“Before [2025]We assume static crypto prices and factor more normalized quantities, resulting in 6% yoy transaction income growth vs. Consensus of 3% growth, ”said Citi.
“Not unlike before, we expect the stock to remain as a” risk-on “game of 2025 and will probably remain unstable about macro developments and fluctuations in the market mood,” Citi continued. “That said, we expect the next 1-2 years to be very formative of Coinbases business model/competitive strategy as well as for the larger digital asset space. “
One of Coinbas’s most important priorities in the past year has been to diversify its income stream, of which 50% still come from commercial fees. Retailers who pay the highest commercial fee still have not returned to the same levels seen in 2021, according to the research company Kaiko. The proportion of volume coming from this clientele, shrunk to only 18%, down from 40% in 2021, which continues to weigh on transaction revenue, Kaiko said.
According to Citi, Coinbase could solve this problem in 2025 by leaning further into the tokenization of assets, embedded smart contract applications and web3, the potential efficiency of cross-border and transfer and using blockchain as an AI management tool, among others.
“In our opinion, the next development for Coinbase’s growth track will rely on the tool … an area with many evidence, but maybe waiting to be unlocked with clearer rules,” the bank’s analysts wrote.
