On Friday, BofA Securities maintained its Underperform rating on Coinbase (NASDAQ:COIN) Global Inc. (NASDAQ:COIN) with a steady price target of $79.00. The firm's stance comes even as Coinbase shares experienced an uptick in after-hours trading following a strong fourth-quarter performance that surpassed expectations in both top-line revenue and Adjusted EBITDA.
Coinbase's transaction revenue for the fourth quarter exceeded forecasts, primarily driven by a higher-than-anticipated take-rate. The company reported transaction volumes of $154 billion, surpassing both BofA Securities and the broader market's expectations of $150 billion and $137 billion, respectively. The blended take-rate of 0.34% was above the predicted 0.30%, contributing to the transaction revenue beat at $529 million, compared to the $444 million and $413 million anticipated by BofA Securities and the market.
Despite the positive revenue results, the firm's operating expenses were higher than estimates, totaling $838 million. However, Coinbase's Adjusted EBITDA came in at $305 million, outperforming the expected figures of $266 million by BofA Securities and $252 million by the market consensus. Looking ahead to the first quarter, Coinbase anticipates transaction expenses to stay consistent as a percentage of net revenue in the mid-teens.
In terms of future expenditures, Coinbase expects technology and development, plus general and administrative expenses to be slightly up, ranging from $600 million to $650 million, a slight increase from $604 million in the fourth quarter. Sales and marketing expenses are projected to be between $85 million and $100 million. For the first quarter, subscription and services revenues are estimated to be between $410 million and $480 million, with the actual figures contingent on the crypto asset prices for the remainder of the quarter.
InvestingPro Insights
Following the upbeat fourth-quarter performance of Coinbase Global Inc. (NASDAQ:COIN), analysts at BofA Securities maintained their Underperform rating with a price target of $79.00. Despite this cautious outlook, two analysts have revised their earnings upwards for the upcoming period, reflecting a potential reassessment of Coinbase's financial trajectory. This optimism may be bolstered by the company's significant return over the last week, which saw a 16.68% increase in price total return, and an even more impressive 152.58% return over the last year, indicating strong investor confidence in the company's market position.
InvestingPro Data reveals a market capitalization of $39.64 billion for Coinbase, highlighting its substantial presence in the digital currency exchange market. However, the company's financial health is a mixed bag, with a negative P/E ratio (Adjusted) for the last twelve months as of Q3 2023 at -33.01, suggesting that investors are valuing the company's growth prospects rather than current earnings. Additionally, the Price / Book ratio for the same period stands at 6.69, which may suggest the stock is trading at a premium relative to its book value.
InvestingPro Tips indicate that while the stock generally trades with high price volatility, it has shown a strong return over the last month and three months, with price total returns of 23.75% and 70.93%, respectively. This volatility and performance could be of interest to investors looking for dynamic growth opportunities in their portfolios. It is important to note that analysts do not anticipate the company will be profitable this year and the stock does not pay a dividend, which might influence the investment strategy for income-focused shareholders.
For investors seeking a deeper analysis and additional insights, there are more InvestingPro Tips available for Coinbase. These can be accessed at Investing.com. To enhance your investment research, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. This exclusive offer provides access to a wealth of financial data and expert analysis that can help inform your investment decisions.
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