On Thursday, Monness, Crespi, Hardt maintained a Buy rating on Coinbase (NASDAQ:COIN) Global Inc. (NASDAQ:COIN) stock with a steady price target of $245.00. The firm's analyst noted that Coinbase's revenue fell short of expectations due to a decrease in cryptocurrency prices and asset volatility in the third quarter compared to the second. However, the company's EBITDA slightly surpassed consensus.
The analyst highlighted that, despite a challenging third quarter in 2024, Coinbase's Board authorized a $1 billion share buyback program. The beginning of October saw a slow transactional start with approximately $190 million in revenue, which is nearly double the transactional contribution at the same point in the previous year. The subscription and services outlook for the fourth quarter aligns with the consensus.
Coinbase is recognized for taking appropriate steps to capitalize on income streams stemming from crypto utility, including both established use cases and new ventures such as payments. The analyst's reiteration of the Buy rating reflects confidence in Coinbase's strategic positioning within the cryptocurrency sector.
The firm also expressed a belief in the continued progression of crypto adoption, though acknowledging it may not follow a linear path. This optimism is held despite the recent challenges faced by Coinbase in the third quarter of 2024.
In other recent news, Coinbase Global Inc. reported robust financial results in its Q3 2024 earnings call. Despite softer market conditions, the company maintained a positive adjusted EBITDA for the seventh consecutive quarter and reported a positive net income for the fourth consecutive quarter.
The revenue from subscriptions and services is projected to surpass $2 billion in 2024, indicating a successful shift from dependence on transaction fee revenue. Coinbase's balance sheet remains healthy with $8.2 billion, supporting a $1 billion stock buyback program.
Recent developments include a significant increase in stablecoin transaction volumes and the USDC market cap growing to $36 billion. Coinbase is strategically focusing on driving revenue, increasing the utility of crypto, and achieving regulatory clarity. However, transaction revenue decreased by 27% quarter-over-quarter to $573 million due to lower trading volumes and crypto volatility.
The company is cautious about potential headwinds in Q4, including a decline in Ethereum prices and lower interest rates. Despite these challenges, Coinbase remains optimistic about the future of crypto regulation and the potential for increased capital inflows with clearer guidelines.
InvestingPro Insights
To complement the analysis provided by Monness, Crespi, Hardt, recent data from InvestingPro offers additional context on Coinbase's financial performance and market position. Despite the challenges noted in the third quarter, Coinbase's revenue growth remains robust, with a 74.22% increase over the last twelve months as of Q2 2024. This aligns with the InvestingPro Tip that analysts anticipate sales growth in the current year.
The company's profitability is also noteworthy, with an EBITDA growth of 237.02% over the same period. This strong performance is reflected in Coinbase's market capitalization of $47.3 billion, indicating significant investor confidence. An InvestingPro Tip suggests that Coinbase is trading at a low P/E ratio relative to near-term earnings growth, with a PEG ratio of 0.18, potentially signaling an attractive valuation despite the high earnings multiple mentioned in another tip.
Investors should note that Coinbase's stock has shown a remarkable 174.56% total return over the past year, corroborating the InvestingPro Tip of high returns over the last year. However, potential investors should be aware of the stock's high volatility, as indicated by another InvestingPro Tip.
For those seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for Coinbase, providing a deeper understanding of the company's financial health and market position.
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