Coinbase Earnings Pain Likely as Retail Activity Slumps, Wall Street Analysts Warn

Coinbase (COIN) is heading into its first-quarter net study connected shaky ground, with 4 Wall Street analysts expecting a miss arsenic the retail trading lull is apt to unit the crypto exchange’s astir profitable concern lines.

The institution is scheduled to study first-quarter results connected Thursday post-market. The analysts are projecting net per stock (EPS) falling to $1.93 from $2.26 in the 4th quarter and gross dropping to $2.1 cardinal from $2.27 billion, according to FactSet data.

In the year-earlier archetypal quarter, it reported EPS of $4.40 and gross of $1.2 billion. Trading measurement is expected to onshore astir the $403.8 cardinal people vs. $439 cardinal successful the 4th quarter.

J.P. Morgan chopped its EPS estimation to $1.59, citing a 10% driblet successful Coinbase’s trading measurement and a 17% descent successful full crypto marketplace headdress during the quarter. Adjusted for crypto plus losses, they spot EPS astatine $2.39, supported successful portion by controlled expenses and dependable subscription revenue.

Barclays and Compass Point spot deeper trouble. Barclays slashed its gross and EBITDA forecasts, saying the marketplace has cooled sharply since January contempt stablecoin growth. It pegs retail volumes astatine $69 billion, importantly beneath the Street's mean estimation of $79.8 billion.

Compass Point, much bearish still, downgraded the banal to sell, projecting transaction gross of $1.24 billion, 7% beneath the consensus. It argues that Coinbase is losing retail stock to decentralized exchanges (DEXs) and warns of further symptom successful the 2nd quarter.

Popular trading level Robinhood, past week, reported a 13% driblet successful transaction-based gross from the 4th fourth arsenic markets cooled successful the archetypal 3 months of the year.

Stablecoins to the rescue?

The 1 country of optimism: stablecoins.

Coinbase’s gross from USDC surged arsenic the stablecoin's marketplace headdress climbed 42% during the quarter, helping bolster subscription revenue. Barclays estimates $304 cardinal successful first-quarter USDC-related revenue, and adjacent the skeptics astatine Compass Point admit this helped offset falling staking income owed to the descent successful ether’s price.

Oppenheimer chopped its measurement forecast to $380 cardinal from $440 billion, but noted that Coinbase gained U.S. spot trading marketplace share. That’s a affirmative sign, but 1 that whitethorn not substance if retail traders support sitting connected their hands.

There’s besides increasing interest astir longer-term competitory pressures. Analysts noted that decentralized exchanges — particularly those operating connected faster and cheaper blockchains similar Solana and Coinbase’s ain Base — are drafting successful retail users looking to commercialized a wider array of tokens. While Coinbase’s U.S. marketplace stock is up, its dominance arsenic a centralized, regulated speech whitethorn not beryllium capable to fend disconnected this shift.

Looking ahead, analysts caution that a near-term rebound successful trading whitethorn beryllium dilatory to materialize, particularly with retail traders often hesitant to re-enter the marketplace until they recoup earlier losses.

Shares of Coinbase are down 23% year-to-date, trading astatine $198.06, portion bitcoin is up 3.8% since the opening of the twelvemonth astatine $97,023.

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