When Coinbase releases its Q4 and 2023 annual earnings report on Tuesday after the market close, investors should expect another underwhelming performance from the US-based crypto exchange.
According to analysts surveyed by FactSet, Coinbase’s revenue is expected to have dropped slightly to USD 589 million in the last quarter of 2022, compared to the previous quarter’s reported revenue of USD 590 million, which was already affected by negative sentiment in the cryptocurrency industry following the bankruptcy of Celsius Network in July 2022.
In a note published on Thursday, Chris Brendler of D.A. Davidson downgraded Coinbase’s shares from “buy” to “neutral,” citing the expectation of disappointing Q4 earnings and 2023 guidance. Brendler also thinks the stock needs to take a break after almost doubling in value this year, and he sees little risk of the stock rallying around earnings.
Coinbase CEO Brian Armstrong announced in December that the company’s revenue for the full year will be cut in half or more compared to 2021, as the crypto exchange has faced challenges due to significant drops in cryptocurrency prices and ongoing ramifications from the collapse of its rival, FTX.
Currently, analysts’ projections for Coinbase’s annual revenue in 2022 stand at $3.1 billion, indicating a 61% decline from the previous year.
Oanda’s Edward Moya suggested that those trading Coinbase shares should brace themselves for the upcoming earnings report. Moya added that option activity indicates another significant market shift is probable after the earnings release, and the results and earnings call could result in a near 20% movement.
