Coinbase (NASDAQ:COIN) Global Inc., the popular cryptocurrency exchange, is set to report an improved financial performance for the third quarter of 2023, according to analysts at Needham & Co. This positive outlook comes despite a more than 50% drop in trading volume and an ongoing Securities and Exchange Commission lawsuit.
Needham predicts that the company's revenue will reach $654.7 million, up from $590 million last year. The increase is attributed to higher fees from trading customers and the USDC stablecoin partnership, which is also generating more interest income on reserves.
In addition, the quarterly loss is projected to decrease significantly to about $130 million from $544.6 million last year. If realized, this would represent the seventh consecutive quarterly loss amid a crypto price collapse from late 2021 highs.
Despite these challenges, Needham maintains a "buy" rating on Coinbase shares. The shares have rallied 120% this year to around $78 since their Nasdaq debut in April 2021 but remain significantly below their record high of over $400.
The imminent launch of a direct investment Bitcoin ETF is further fuelling positive sentiment towards Coinbase. This optimism persists despite potential investor concerns surrounding the company's financial health and legal issues.
InvestingPro Insights
InvestingPro data provides a comprehensive view of Coinbase Global Inc's current financial situation. With an adjusted market cap of 19.5B USD and a negative P/E ratio of -14.76, the company's financial health is indeed a topic of interest. Revenue figures for the last twelve months as of Q2 2023 show a total of 2580.23M USD, indicating a significant presence in the market despite a decline in revenue growth of -55.34%.
InvestingPro Tips shed further light on the company's performance. Notably, analysts do not anticipate the company will be profitable this year, and it has not been profitable over the last twelve months. This aligns with the article's mention of the seventh consecutive quarterly loss. Moreover, the company's stock price movements are quite volatile, which is reflected in the 51.62% price uptick over the last six months and the significant fall over the last five years.
These insights underscore the importance of a comprehensive understanding of a company's financial landscape. For additional tips, consider exploring InvestingPro, which offers an extensive array of data and tips for numerous companies.
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