The stock of cryptocurrency trading platform Coinbase Global (COIN) is down 5% on news that the company’s latest financial results came up short.
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Coinbase reported third-quarter earnings per share (EPS) of $0.28, missing analyst consensus estimates of $0.45. Revenue in the July through September period totaled $1.21 billion, below the $1.26 billion expected on Wall Street.
The company’s management team attributed the bad outcome to a slump in cryptocurrency trading during the summer months when the price of Bitcoin (BTC) was on the decline and below $60,000. Trading in crypto is likely to improve in the current fourth quarter as Bitcoin breaks out and rises close to its all-time high of just under $74,000.
Closely Linked to Crypto
Coinbase operates the largest U.S. marketplace for buying and selling cryptocurrencies. Its platform is popular with individual retail investors. As such, the company’s fortunes are closely tied to the price movements of digital coins and tokens such as Bitcoin and Ethereum (ETH). When the crypto market slumps, Coinbase takes a hit.
Within its core crypto trading business, revenue from retail trading grew 98% year-over-year during the the quarter to $483.3 million. Institutional revenue brought in $55.3 million during the third quarter, a 292% increase from the same period in 2023. Total transaction revenue of $572.5 million was up 98% from a year ago.
Along with its third-quarter results, Coinbase Global announced a new $1 billion stock buyback program. COIN stock is up 22% so far this year.
Is COIN Stock a Buy?
The stock of Coinbase Global has a consensus Moderate Buy rating among 18 Wall Street analysts. That rating is based on nine Buy, eight Hold, and one Sell recommendations issued in the last three months. The average COIN price target of $255.57 implies 20.70% upside from current levels.
