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Why Is Coinbase Global (COIN) Up 73.5% Since Last Earnings Report?
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A month has gone by since the last earnings report for Coinbase Global, Inc. (COIN - Free Report) . Shares have added about 73.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Coinbase Global due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Coinbase Q3 Earnings Surpass Estimates on Higher Revenues
Coinbase Global, Inc. reported third-quarter 2024 core earnings of 62 cents per share, which beat the Zacks Consensus Estimate by 51.2%. The company had incurred a loss of 1 cent per share in the year-ago quarter. The quarterly results gained from higher consumer transaction revenues, institutional transaction revenues, stablecoin revenues, an increase in blockchain rewards, higher custodial fee revenues and improved adjusted EBITDA, offset by escalating expenses.
Operational Update
Total Trading Volume more than doubled year over year to $185 million in the reported quarter, reflecting an increase in both the total market and market share in the United States. Total revenues of $1.2 billion missed the Zacks Consensus Estimate by 5.2%. The top line surged 79% year over year on higher Transaction revenues, Subscription and services revenues and Other revenues. Total transaction revenues surged 98% year over year to $572.5 million in the quarter. The growth was due to an increase in consumer transaction revenues of $478.2 million and an increase in institutional transaction revenues of $20.9 million.
Total subscription and services revenues increased 66% year over year to $556 million in the reported quarter. The growth was due to an increase in stablecoin revenues of $40.2 million, an increase of $82.7 million in blockchain rewards, higher custodial fee revenues, interest and finance fee income as well as a rise in other subscription and services revenues. Total other revenues increased 50% to $76.5 million in the quarter, primarily reflecting an increase of $22.8 million due to higher average corporate balances.
Adjusted EBITDA was $449 million in the reported quarter, which more than doubled year over. Total operating expenses increased 37% to $1 billion in the quarter due to higher Transaction expense, Technology and development, Sales and marketing and General and administrative expenses.
Financial Update
Coinbase exited the third quarter with cash and cash equivalents of $7.72 billion as of Sept 30, 2024, up 50% from 2023-end. As of Sept. 30, 2024, long-term debt increased 42% from 2023-end to $4.2 billion. Shareholders' equity was $8.7 billion at the third-quarter 2024-end, up 39% from 2023-end. Net cash provided by operating activities was $1.6 billion in the first nine months of 2024, which surged 71.5% year over year.
Q4 Outlook
Coinbase expects subscription and services revenues to be in the range of $505-$580 million. COIN expects fourth-quarter transaction expenses to be in the mid-teens as a percentage of net revenues.
Coinbase expects technology & development and general & administrative expenses in the range of $690-$730 million. It expects sales and marketing expenses to increase quarter over quarter to $170-$220 million, primarily driven by higher USDC rewards expense and higher seasonal brand spending.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
The consensus estimate has shifted 17.93% due to these changes.
VGM Scores
At this time, Coinbase Global has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Coinbase Global has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Coinbase Global belongs to the Zacks Financial Transaction Services industry. Another stock from the same industry, Fiserv (FI - Free Report) , has gained 11.5% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Fiserv reported revenues of $4.88 billion in the last reported quarter, representing a year-over-year change of +5.8%. EPS of $2.30 for the same period compares with $1.96 a year ago.
For the current quarter, Fiserv is expected to post earnings of $2.48 per share, indicating a change of +13.2% from the year-ago quarter. The Zacks Consensus Estimate has changed +0% over the last 30 days.
Fiserv has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Why Is Coinbase Global (COIN) Up 73.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Coinbase Global, Inc. (COIN - Free Report) . Shares have added about 73.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Coinbase Global due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Coinbase Q3 Earnings Surpass Estimates on Higher Revenues
Coinbase Global, Inc. reported third-quarter 2024 core earnings of 62 cents per share, which beat the Zacks Consensus Estimate by 51.2%. The company had incurred a loss of 1 cent per share in the year-ago quarter. The quarterly results gained from higher consumer transaction revenues, institutional transaction revenues, stablecoin revenues, an increase in blockchain rewards, higher custodial fee revenues and improved adjusted EBITDA, offset by escalating expenses.
Operational Update
Total Trading Volume more than doubled year over year to $185 million in the reported quarter, reflecting an increase in both the total market and market share in the United States. Total revenues of $1.2 billion missed the Zacks Consensus Estimate by 5.2%. The top line surged 79% year over year on higher Transaction revenues, Subscription and services revenues and Other revenues. Total transaction revenues surged 98% year over year to $572.5 million in the quarter. The growth was due to an increase in consumer transaction revenues of $478.2 million and an increase in institutional transaction revenues of $20.9 million.
Total subscription and services revenues increased 66% year over year to $556 million in the reported quarter. The growth was due to an increase in stablecoin revenues of $40.2 million, an increase of $82.7 million in blockchain rewards, higher custodial fee revenues, interest and finance fee income as well as a rise in other subscription and services revenues. Total other revenues increased 50% to $76.5 million in the quarter, primarily reflecting an increase of $22.8 million due to higher average corporate balances.
Adjusted EBITDA was $449 million in the reported quarter, which more than doubled year over. Total operating expenses increased 37% to $1 billion in the quarter due to higher Transaction expense, Technology and development, Sales and marketing and General and administrative expenses.
Financial Update
Coinbase exited the third quarter with cash and cash equivalents of $7.72 billion as of Sept 30, 2024, up 50% from 2023-end. As of Sept. 30, 2024, long-term debt increased 42% from 2023-end to $4.2 billion. Shareholders' equity was $8.7 billion at the third-quarter 2024-end, up 39% from 2023-end. Net cash provided by operating activities was $1.6 billion in the first nine months of 2024, which surged 71.5% year over year.
Q4 Outlook
Coinbase expects subscription and services revenues to be in the range of $505-$580 million. COIN expects fourth-quarter transaction expenses to be in the mid-teens as a percentage of net revenues.
Coinbase expects technology & development and general & administrative expenses in the range of $690-$730 million. It expects sales and marketing expenses to increase quarter over quarter to $170-$220 million, primarily driven by higher USDC rewards expense and higher seasonal brand spending.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
The consensus estimate has shifted 17.93% due to these changes.
VGM Scores
At this time, Coinbase Global has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Coinbase Global has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Coinbase Global belongs to the Zacks Financial Transaction Services industry. Another stock from the same industry, Fiserv (FI - Free Report) , has gained 11.5% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Fiserv reported revenues of $4.88 billion in the last reported quarter, representing a year-over-year change of +5.8%. EPS of $2.30 for the same period compares with $1.96 a year ago.
For the current quarter, Fiserv is expected to post earnings of $2.48 per share, indicating a change of +13.2% from the year-ago quarter. The Zacks Consensus Estimate has changed +0% over the last 30 days.
Fiserv has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.