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Coinbase Q3 Preview: Rebound Quarter Inbound?

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Earnings season continues to chug along, with companies finally pulling the curtain back and unveiling what has transpired behind the scenes.

Needless to say, investors have been more than ready to face the music, as a hawkish Federal Reserve has been a thorn in the market’s side all year long.

A widely-popular company, Coinbase Global (COIN - Free Report) , is gearing up to unveil Q3 earnings on November 3rd, after the market close.

Coinbase is the largest U.S. cryptocurrency exchange, trading a vast number of digital assets.

Currently, the crypto giant carries a Zacks Rank #3 (Hold) paired with an overall VGM Score of a D.

Let’s take a deeper dive into how the company currently stacks up.

Share Performance & Valuation

COIN shares have experienced negative price action in 2022, losing more than 75% in value and coming nowhere near the general market’s performance.

Zacks Investment Research
Image Source: Zacks Investment Research

Over the last three months, the adverse price action of COIN shares has continued, down more than 20% and again underperforming the S&P 500.

Zacks Investment Research
Image Source: Zacks Investment Research

The company’s forward price-to-sales ratio currently comes in at 4.2X, below its median of 6.2X since IPO and reflecting a 39% discount relative to its Zacks Financial sector.

COIN sports a Style Score of a C for Value.

Zacks Investment Research
Image Source: Zacks Investment Research

Quarterly Estimates

Analysts have primarily been bearish in their earnings outlook, with three negative earnings estimate revisions hitting the tape over the last several months. The Zacks Consensus EPS Estimate of -$2.23 indicates a Y/Y earnings decline of roughly 230%.

Zacks Investment Research
Image Source: Zacks Investment Research

The company’s top-line appears to be undergoing some turbulence as well; the Zacks Consensus Sales Estimate of $642.8 million suggests a decline of more than 50% from year-ago quarterly sales of $1.3 billion.

Quarterly Performance & Market Reactions

Coinbase has struggled to exceed quarterly estimates as of late, falling short of earnings and revenue expectations in its last two releases.

Just in its latest print, COIN fell short of bottom-line expectations by more than 60% and missed revenue estimates by 7.8%. Below is a chart illustrating the company’s revenue on a quarterly basis.

Zacks Investment Research
Image Source: Zacks Investment Research

In addition, it’s worth noting that the market hasn’t reacted positively to COIN’s recent quarterly results, with shares moving downward following five of its last six prints.

Putting Everything Together

COIN shares have struggled in 2022, underperforming the general market across several timeframes, indicating that sellers have been in control.

The company’s forward price-to-sales ratio has come down by a fair margin, nowhere near its median since IPO and below its Zacks sector average.

Analysts have been bearish in their earnings outlook, with estimates suggesting Y/Y declines in earnings and revenue.

The company has struggled to exceed quarterly estimates as of late, falling short of earnings and revenue expectations in two consecutive quarters.

Heading into the print, Coinbase Global (COIN - Free Report) carries a Zacks Rank #3 (Hold) with an Earnings ESP Score of -1.1%.


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