Coinbase Stock Performance in 2023
Coinbase stock has rallied sharply in 2023, rising more than 80% through Friday's close. However, the stock has lost about two-thirds of its value over the past year.
Wall Street Expectations for Coinbase
Here are the Wall Street expectations for Coinbase's key figures, according to data from Bloomberg:
Revenue: $581.2 million
Expected adjusted earnings per share: ($2.44)
Adjusted EBITDA: ($201.8 million)
Monthly Transaction Users (MTUs): 8.4 million
Crypto Industry Impact
Coinbase is battling the impact of last year's crypto collapse, which has affected the industry's trust in platform security. The platform's total assets are expected to be $88.8 billion, the lowest amount over the past two years.
Downgraded Forecast for Non-Trading Business
Last week, JPMorgan and D.A. Davidson analysts revised their forecasts for Coinbase's non-trading business lines, subscriptions, and services. D.A. Davidson also downgraded Coinbase's stock from Buy to Neutral, citing a treacherous near-term path. Subscriptions and services revenue is expected to total $235.4 million in the fourth quarter, or about 40% of the company's total revenue.
SEC Enforcement Actions Raise Questions
Recent enforcement actions from the SEC have raised questions about whether Coinbase's staking and custody businesses could be under threat. Analysts will also be closely monitoring expenses.
Cost-Cutting Measures by Coinbase
After spending over $1 billion in the first half of 2022, Coinbase has laid off 2,110 workers. The company also announced that it plans to cut operating expenses by 25% by the end of next quarter. The company has also halted its Japan operations, and NFT marketplace creator drops. With an expected $201 million adjusted EBITDA loss in Q4, the company should meet its forecasted full-year adjusted EBITDA loss of less than $500 million in 2022.
