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Coinbase Global (COIN) experienced a significant decline in its stock price shortly after the market opened on Friday, despite reporting impressive fourth-quarter results that exceeded both revenue and earnings expectations.
For the quarter ending December 31, Coinbase reported a remarkable 138.2% increase in revenue year-over-year, totaling $2.3 billion. Additionally, the company’s earnings per share (EPS) surged to $4.68, more than quadrupling from the same period last year.
In its shareholder communication, Coinbase stated, “Coinbase delivered strong Q4 and full-year 2024 results. Looking at the bigger picture, recent months have indicated a significant shift in the regulatory landscape, opening new doors for Coinbase and the cryptocurrency sector.”
These results surpassed the analysts’ projections, with Wall Street anticipating revenues of $1.9 billion and an EPS of $1.81, according to CNBC.
Coinbase also highlighted that its trading volume nearly tripled year-over-year, reaching $439 billion, buoyed by a 224% increase in consumer trading activity to $94 billion and a 176% rise in institutional trading to $345 billion.
Furthermore, Coinbase noted, “The voice of crypto was prominent in the U.S. elections, signaling the end of the regulatory enforcement approach that stunted our industry’s growth in the U.S. The Trump administration is quickly working to deliver on its promise of making the U.S. the leading hub for crypto, and globally, political leaders are increasingly focused on and investing in cryptocurrency.”
Evaluating Coinbase Stock: Buy, Sell, or Hold?
Prior to Friday’s trading, Coinbase’s stock had witnessed a twofold increase compared to the previous year, which may have prompted some investors to secure profits following the earnings announcement. Nonetheless, analysts remain optimistic about the stock’s potential for further growth.
The average target price for COIN, as per S&P Global Market Intelligence, stands at $320.71, suggesting a potential upside of nearly 15% from its current level, with a consensus rating of Buy.
Needham, a financial services firm, also holds a Buy rating for the stock, setting a price target of $330. Analyst John Todaro emphasized that Coinbase represents a compelling opportunity to invest in the expanding crypto asset space, which encompasses growth areas such as stablecoins, decentralized finance (DeFi), non-fungible tokens (NFTs), and multiple exchanges dealing in both spot and derivatives as well as various blockchains including Base.
Looking forward, Todaro anticipates that Coinbase will diversify its services to include a broader range of financial activities related to cryptocurrency. He also expects that immediate growth will stem from the company’s staking services as an increasing number of crypto networks transition to a proof-of-stake consensus model, as well as from its stablecoin interest account initiatives.
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