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Wall Street expects Coinbase Global (NASDAQ:COIN) to deliver fairly downbeat Q2 numbers on the premise that trading volumes on the cryptocurrency exchange have pulled back markedly during the three-month period.
That’s Raymond James analyst Patrick O’Shaughnessy’s base case, estimated that Coinbase’s (COIN) average daily volumes totaled $2.36B in Q2, down 31% from the previous quarter and trailing the $2.93B consensus.
The prospect of weakening volumes centers on lower crypto prices, with bitcoin (BTC-USD) down 4% in Q2. Ether (ETH-USD), though, gained 4.9% in the same period. In Q1, when Coinbase (COIN) posted a strong earnings beat that reflected the surge in crypto trading when spot bitcoin ETFs were approved, bitcoin and ether jumped 55% and 49%, respectively.
Based on the average analyst estimate, Coinbase (COIN) is anticipated to turn in Q2 GAAP EPS of $0.92, slumping from $4.40 in the prior quarter and rising from -$0.42 a year before. Similarly, Q2 revenue is forecast to slide to $1.36B from $1.64B in Q1 and $707.9M in Q2 2023. Coinbase is slated to publish its Q2 numbers on Thursday after the closing bell.
Seeking Alpha analyst Joseph Parrish said he will be focusing on whether Coinbase’s (COIN) Q1 transaction revenues remained high in Q2, “or if those were just cyclical business opportunities that tracked the BTC halving. Similarly, we’ll want to see if debt is paid down and if stock-based compensation increases or moderates.”
Elsewhere, Citi’s Peter Christiansen upgraded (COIN) last week on the basis that regulatory risks have eased with the Supreme Court overturning the Chevron deference doctrine — the previous decision that gave regulatory agencies wide latitude in interpreting laws enacted by Congress.
In any case, analysts have raised their profit and sales estimates over the last three months, with eight up revisions to EPS (vs. five down revisions) and 10 up revisions to revenue (vs. five down revisions). Coinbase (COIN) has demonstrated a solid track record of surpassing EPS estimates, having exceeded Wall Street’s consensus in nine of the last 12 quarters.
(COIN), which has a strong relationship to the price of bitcoin (BTC-USD), gained 1.9% in midafternoon trading, bringing its year-to-date gains to 32%.
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