Coinbase Global (COIN) Stock: Downgrade Ahead of Q1 Earnings Amid Volume Concerns
TLDR
Coinbase received a downgrade from Monness, Crespi, Hardt & Co. ahead of its Q1 earnings report on May 8
Analysts expect Q1 earnings of $1.87 per share on revenue of $2.07 billion
COIN stock has lost over 20% this year due to weaker trading volumes and regulatory concerns
Stablecoin legislation could be a potential catalyst for future performance
Options traders anticipate a 7.81% stock price move in either direction following earnings
Coinbase Global is facing mixed signals as it prepares to release its first-quarter 2025 earnings report on May 8. The cryptocurrency exchange recently received a downgrade from Monness, Crespi, Hardt & Co., with analyst Gus Galá changing his rating from Buy to Neutral.
Galá removed his $275 price target in what he described as a “tactical move” before the earnings announcement. He expects either an earnings miss or downward estimate revisions, which could create better buying opportunities later.
The stock has been climbing since hitting a low of $151.47 in April. However, Galá believes short-term caution makes sense right now.
Trading volume appears to have improved in May compared to April. Yet limited data makes analysts hesitant to make firm predictions.
Source: Main Street Data
Wall Street expects Coinbase to report earnings of $1.87 per share. This represents a 57% decrease from the same period last year.
Revenue is projected to reach $2.07 billion. This would be a 29% increase year-over-year.
The company has a strong track record with earnings reports. It has only missed estimates twice in the past nine quarters.
Rosenblatt analyst Chris Brendler maintains a Buy rating on COIN stock. However, he recently lowered his price target from $290 to $260.
Brendler reduced his Q1 estimates due to weaker trading volumes in April. He also cited cautious signs from Robinhood’s recent earnings call.
Stablecoin Legislation Could Be Key
While he expects strong revenue from stablecoins, Brendler worries that non-trading blockchain revenue might miss company forecasts. Still, he believes this weakness was mostly anticipated.
The company can cut costs if needed to protect profits. Brendler remains optimistic about Coinbase’s long-term prospects.
He expects crypto activity to increase later this year. Growing non-trading revenue could help boost the stock’s value over time.
Coinbase is more than just a digital currency exchange. The company co-founded the stablecoin USDC, which is backed by physical U.S. dollars.
Stablecoins may gain greater importance as U.S. cryptocurrency legislation evolves. Galá points to stablecoin legislation as a potential catalyst for Coinbase.
Currently, the GENIUS Act is in focus. This bill calls for supervision at both state and federal levels. It offers a less restrictive framework for stablecoin issuers than the competing STABLE Act.
The GENIUS Act faced setbacks over the weekend. Nine of the 60 votes needed to begin vote-taking were lost after several senators changed their positions.
A group of pro-crypto Democrats expressed concerns about the bill’s current form. They called for stronger provisions on money laundering and national security.
Galá would prefer a bill with greater bipartisan support. He believes the current GENIUS Act risks creating complex regulations.
Meanwhile, the STABLE Act has advanced out of the House Committee on Financial Services. This bill would require stablecoin issuers to obtain banking licenses.
Coinbase has been exploring the banking license option. Galá sees the STABLE Act as a possible “net benefit to Coinbase” and an “x-factor” for its future.
The company is scheduled to announce its Q1 2025 results tomorrow, May 8. Options traders are preparing for volatility, expecting a 7.81% move in either direction following the report.
Overall, analysts maintain a Moderate Buy consensus on COIN stock. This is based on eleven Buys, ten Holds, and one Sell rating in the past three months. The average price target of $270.85 suggests 37.56% upside potential.
Shares of the crypto exchange were down 1.3% to $196.91 on Tuesday, while major indexes also declined slightly.
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Filed under: News - @ May 7, 2025 12:26 pm