Coinbase Earnings: Will Increased Crypto Volume Help COIN?
Coinbase Earnings: Will Increased Crypto Volume Help COIN?
Coinbase is set to report earnings on Thursday, May 2, after the market closes.
- Investors expect EPS and revenue to expand from a year ago as trading volume swells.
- COIN is trading with an IVR of 77.5 and an expected May 3 move of +/- 22.85 points.
- The SEC voted earlier this year to allow investors to trade bitcoin exchange-traded funds.
Coinbase Global (COIN) is scheduled to report first-quarter fiscal earnings on Thursday, May 2, after market close. Investors hope that the earnings will renew the stock’s uptrend, which fell apart in mid-March alongside the broader stock market.
Still, COIN outpaces the S&P 500, with a year-to-date gain of about 16.3% versus 5.36% for the index. The last time COIN reported earnings, the stock price surged over 10% in the following two days of trading.
What do investors expect from COIN?
Analysts expect earnings per share (EPS) of $1.14 and revenue of $1.4 billion. That would be up from -$0.34 EPS and $773 million revenue in the first quarter of 2023. It would also be up from last quarter’s EPS of $1.04 and revenue of $954 million.
According to TradingView data, analysts expect a 1-year price target of $239.26, which would be a gain of nearly 19% from the current stock price. There are currently 10 strong buy ratings, 12 hold ratings, three sell ratings and three strong sell ratings on the stock among 28 analysts.
A pickup in trading volume should provide a major tailwind for Coinbase since it collects fees from trading and spread markups. According to data.bitcoinity.org, bitcoin trading volume on the Coinbase exchange rose to 675,000 btc in February, the highest since December 2022.
The Securities and Exchange Commission (SEC) voted earlier this year to allow investors to trade bitcoin exchange-traded funds (ETFs). Traders hailed that as a milestone for crypto assets. Coinbase likely benefited from the move since it sparked wider interest in the asset class and opened bitcoin to more investors.
Trading Coinbase earnings
COIN is trading at about $200 per share as of Wednesday, May 1. That is the lowest since March 1. The recent losses have caused volatility to expand, with the implied volatility rank (IVR) at 77.5.
The May 3 strike shows an implied move of +/- 22.85 points. A hypothetical trade for those believing that COIN will repeat its bullish streak of earnings surprises could go with a short put vertical, selling the 195 and buying the 192.5. That trade produces a max profit of $92 and a max loss of $155, with a probability of profit (POP) of 57%.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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