As a seasoned analyst with over two decades of experience in the financial markets, I have seen my fair share of market fluctuations and earnings reports that miss expectations. However, when it comes to Coinbase, I remain bullish on its long-term prospects.
After Coinbase’s third-quarter earnings didn’t meet expectations, causing their shares to drop, analyst Mike Colonese from H.C. Wainwright still recommends buying the stock, keeping his positive outlook.
On October 30th, Coinbase, the leading public cryptocurrency trading platform, published its third-quarter financial report, which revealed a surprising revenue shortfall as observed by Colonese. He suggested that this could potentially influence the company’s share prices temporarily.
However, despite the revenue miss, largely down to the lower crypto prices during the quarter, the overall take is that this was a solid Q3, 2024.
Significantly, factors like cost management and multiple income sources have been beneficial for Coinbase. Furthermore, the upcoming year presents an optimistic view on cryptocurrency values, as regulatory clarity could further boost positive momentum.
It was good news that management expressed optimistic opinions about the upcoming election and its potential impact on the crypto industry. Notably, CEO Brian Armstrong is confident that no matter who wins next week’s presidential race, the U.S. will have a Congress more supportive of cryptocurrency than ever before. Additionally, Coinbase has started a $1 billion share buyback program, as they plan to distribute capital back to their shareholders in the future.
Mike Colonese said.
Colonese maintained his positive recommendation towards Coinbase, setting a projected price of $255, revising it slightly downward from the previous forecast of $295. This adjustment mirrors the updated prediction for the company’s revenue by 2025.
Based on their latest analysis, H.C. Wainwright’s team has reduced their projected revenue figures for Coinbase. They now expect the company to generate approximately $5.45 billion in 2024, which is a decrease from their previous estimate of $5.67 billion. Similarly, they anticipate a revenue of around $5.37 billion for 2025, a drop from their initial projection of $6.25 billion.
In the third quarter, Coinbase saw a total income of approximately $1.21 billion, which represents a 17% drop compared to the previous quarter, yet a significant 86% surge when compared to the same period last year. This figure falls slightly short of FactSet’s forecast of $1.26 billion.
Potential threats to H.C Wainwright’s Buy recommendation and the price prediction of $255 might stem from high dependence on retail trading income, significant drops in cryptocurrency prices, and unpredictable regulatory changes.
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2024-10-31 23:22