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Is a Beat in Store for Coinbase Global (COIN) in Q1 Earnings?

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Coinbase Global (COIN - Free Report) is slated to report first-quarter 2023 earnings on May 4, after the closing bell. COIN delivered a negative earnings surprise of 2.93% in the last reported quarter.

Let’s see how things have shaped up prior to the announcement.

Increased adoption of a greater number of crypto assets, higher volatility and rising interest in the entire crypto-economy are likely to impact COIN’s first-quarter results.

Retail, institutional and ecosystem partners are likely to have grown across all key metrics, including Verified Users, retail Monthly Transacting Users (MTUs), Trading Volume and Assets on Platform.

However, improved subscription and services revenues are likely to have limited the downside. Given an improving rate environment, COIN estimates a rise in subscription and services revenues for the to-be-reported quarter. Coinbase estimates subscription services revenues to be between $300 million and $325 million in the first quarter.

A strong crypto price cycle, with high prices of many crypto assets, rising volatility, and high interest in crypto across retail and institutional users are likely to have benefited COIN in the first quarter of 2023.

The Zacks Consensus Estimate for revenues is pegged at $652.8 million for the to-be-reported quarter, indicating a decline of 44% from the year-ago reported number.

However, increased competition is likely to have been an overhang. COIN estimates technology and development and general and administrative expenses to be $625 million and $675 million in the first quarter.  It also estimates sales and marketing expenses to be between $60 million and $70 million. The company remains focused on its cost-containment efforts that are likely to have helped deliver improved adjusted EBITDA.

Coinbase expects transaction expenses as a percentage of revenues in the to-be-reported quarter to be in the low-20s.

The Zacks Consensus Estimate is pegged at a loss of $1.44, implying a year-over-year increase of 27.3%.

What the Zacks Model Says

Our proven model predicts an earnings beat for Coinbase this time around. This is because the stock has the right combination of a positive Earnings ESP  and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Earnings ESP: Coinbase has an Earnings ESP of +4.23%. This is because the Most Accurate Estimate is pegged at a loss of $1.38 while the Zacks Consensus Estimate is pegged at a loss of $1.44. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Coinbase Global, Inc. Price and EPS Surprise

Coinbase Global, Inc. Price and EPS Surprise

Coinbase Global, Inc. price-eps-surprise | Coinbase Global, Inc. Quote

Zacks Rank: Coinbase currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Some stocks from the finance sector with the perfect mix of elements to surpass estimates in their upcoming quarterly releases are as follows:

Agree Realty (ADC - Free Report) has an Earnings ESP of +0.59% and a Zacks Rank of 3. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at 96 cents, indicating a decrease of 1.03% from the year-ago reported figure.

ADC’s earnings beat estimates in two of the last four reported quarters and met estimates in the other two.

American Equity Investment has an Earnings ESP of +1.22% and a Zacks Rank #3. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at $1.09 per share, indicating an increase of 18.5% from the year-ago reported figure.

AEL’s earnings missed estimates in two of the last four reported quarters and missed in the other two.

AssetMark Financial (AMK - Free Report) has an Earnings ESP of +1.87% and a Zacks Rank of 2. The Zacks Consensus Estimate for first-quarter 2023 earnings is pegged at 54 cents, indicating an increase of 38.5% from the year-ago reported figure.

AMK’s earnings beat estimates in the last four reported quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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