Crypto exchange Coinbase Global (NASDAQ:COIN) is scheduled to report its first-quarter earnings on Thursday, May 4. The company faced significant headwinds in Q1 due to heightened market uncertainty.
Further, ahead of the earnings release, Needham analyst John Todaro expects a 23% decline in USD Coin’s (USDC-USD) market cap due to the failure of Silicon Valley Bank, which had a negative impact on interest income. Also, the analyst lowered the Q1 trading volume estimate from $147 billion to $151 billion, pointing to lower transaction revenues.
On the positive side, however, he noted that the engagement of retail customers on Coinbase’s platform has increased. Todaro expects this to support the company’s volume growth and has a Buy recommendation on the stock. His price target of $70 implies 36.4% upside potential.
Overall, the Street expects Coinbase to post revenues of $654.2 million in Q1, reflecting a 44% decrease over the prior-year quarter. On the bottom-line front, analysts expect the company to report a loss of $1.15 per share in the first quarter, down from a loss of $1.98 reported in the prior-year quarter.
Is COIN a Good Stock to Buy?
Wall Street is sidelined on Coinbase stock, with a Hold consensus rating based on seven Buys, eight Holds, and five Sells. At $64.89, the average price target implies 26.4% upside from current levels. Shares are up about 52.7% year-to-date.
Technical Analysis Expects Rally to Cool Off
Ahead of the Q1 earnings release, Coinbase stock’s technical indicators signal a bearish trend. COIN is a Sell based on TipRanks’ easy-to-understand summary signals.
According to TipRanks’ technical analysis tool, the stock’s 50-Day EMA (exponential moving average) is 61.47, while its price is $51.32, making it a Sell. Further, COIN’s shorter duration EMA (20-day) also signals a downtrend.
Ending Thoughts
The company is surrounded by regulatory headwinds as it received a Wells notice from the SEC. The notice is an indication that the regulator can take some enforcement action against the company for allegedly breaching securities laws. Nevertheless, the company’s overseas expansion plans could expand its top-line numbers.
