COIN Stock: 3 Key Things to Watch When Coinbase Reports Earnings

  • Coinbase (COIN) will report earnings after the market close.
  • Analysts are expecting revenue of $868.39 million.
  • Shares of COIN stock are down more than 60% year-to-date.
COIN stock - COIN Stock: 3 Key Things to Watch When Coinbase Reports Earnings

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Coinbase (NASDAQ:COIN) is in full focus, as the company will report second-quarter earnings today after the market close. 2022 has been a volatile year for cryptocurrencies and related companies like COIN stock, highlighted by the collapse of the LUNA token and Voyager’s (OTCMKTS:VYGVF) bankruptcy. Meanwhile, the price of Bitcoin (BTC-USD) fell below $20,000, but has since recovered to higher levels.

Brokerages have been vying for market share in the crypto space as well. Today, Interactive Brokers (NASDAQ:IBKR) announced that it will support 24/7 access to crypto trading. Trading will be supported through an “enhanced web application” from Paxos Trust.

Crypto trading volume on the platform has decreased while competitors up their offerings. In March, Coinbase had an average trading volume of $3 billion per day. During July, volume shrank lower to $1.7 billion. As of March 31, the platform had more than 98 million verified users and $256 billion in customer assets held.

With that in mind, let’s take a look at three metrics investors should watch for when Coinbase reports earnings.

COIN Stock: 3 Metrics to Watch For Earnings

First, investors will want to keep an eye on Q2 revenue. The consensus analyst estimate for revenue is $868.39 million. This would imply a year-over-year (YOY) loss of 61%. The low estimate falls at $729.9 million, while the high estimate is $1.17 billion. It’s no surprise Coinbase will report declining YOY revenues, as interest and prices in the crypto market have fallen.

Next up is earnings per share, or EPS. Analysts expect an EPS loss of $1.23, with the low and high estimates at a loss of $2.12 and a loss of 38 cents. In addition, analysts predict Coinbase will report a positive EPS by Q1 of 2023.

Finally, the last — and arguably most important — metric to watch out for is guidance. For Q3, analysts are forecasting $806.05 million in revenue and an EPS loss of $1.08. For the full year, revenue is expected to be $3.76 billion with an EPS loss of $3.59.

Investors are also awaiting updates related to Securities and Exchange Commission (SEC) insider trading charges against a former Coinbase product manager. The SEC stated the manager tipped off two friends on an upcoming crypto the platform was about to list.

However, the argument here is whether some tokens qualify as securities. If they do, then the manager could be found guilty of insider trading. On the other hand, Coinbase argues tokens do not qualify as securities. The company’s chief legal officer Paul Grewal asserted, “Coinbase does not list securities. End of story.”

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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