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Here's What to Expect From Coinbase's (COIN) Q3 Earnings
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Coinbase Global (COIN - Free Report) is slated to report third-quarter 2022 earnings on Nov 3, after the closing bell. COIN delivered an earnings surprise in one of the last four reported quarters while missing in three.
Let’s see how things have shaped up prior to the announcement.
COIN’s third-quarter results are likely to benefit from the increased adoption of a greater number of crypto assets, higher volatility and rising interest in the entire crypto economy. However, soft crypto market conditions are likely to have been a dampener
Retail, institutional and ecosystem partners are likely to have grown across all key metrics, including Verified Users, retail Monthly Transacting Users (MTUs), Trading Volume, and Assets on Platform.
Ethereum’s trading volume growth is likely to have been aided by an increase in institutional interest, the launch of Ethereum 2.0 staking products, and growth in DeFi and NFT.
Given less active core U.S. retail customers, Retail revenues are likely to have suffered.
COIN estimates sequentially lower MTUs in the third quarter to have weighed on trading volumes and, in turn, put pressure on the top line in the to-be-reported quarter. The Zacks Consensus Estimate for revenues is pegged at $642.8 million for the to-be-reported quarter, indicating a decline of 51% from the year-ago reported number. However, improved subscription and services revenues are likely to have limited the downside. COIN estimates third-quarter subscription and services revenues to rise sequentially, driven by increases in interest income.
Coinbase noted a strong crypto price cycle with high prices of many crypto assets, high levels of volatility, and high interest in crypto across retail and institutional users in the to-be-reported quarter. COIN is a market-leading brand exclusively focused on the cryptoeconomy and thus is expected to have benefited from this tailwind.
However, increased competition is likely to have been an overhang. Operating expense is likely to have increased, given higher trading volumes, account verification fees, payment processing fees and digital advertising spend.
Coinbase expects transaction expenses in the to-be-reported quarter to be in the low to mid-20s, sales and marketing expenses to be about $100 million, and technology and development and general and administrative expenses to be $1 billion.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Coinbase Global this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This is not the case below as you can see.
Earnings ESP: Coinbase Global has an Earnings ESP of -1.11%. This is because the Most Accurate Estimate of a loss of $2.60 is pegged lower than the Zacks Consensus Estimate of a loss of $2.23. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Some stocks from the finance sector with the perfect mix of elements to surpass estimates in their upcoming quarterly releases are as follows:
Enact Holdings (ACT - Free Report) has an Earnings ESP of +1.69% and a Zacks Rank of 3. The Zacks Consensus Estimate for third-quarter 2022 earnings is pegged at 89 cents, indicating an increase of 5.9% from the year-ago reported figure.
ACT’s earnings beat estimates in the last four reported quarters.
EverQuote (EVER - Free Report) has an Earnings ESP of +4.88% and a Zacks Rank #2. The Zacks Consensus Estimate for third-quarter 2022 earnings is pegged at a loss of 41 cents per share, wider than the year-ago loss of 18 cents.
EVER’s earnings beat estimates in three of the last four reported quarters, while missing in one.
Trean Insurance Group has an Earnings ESP of +11.11% and a Zacks Rank of 3. The Zacks Consensus Estimate for third-quarter 2022 earnings is pegged at 9 cents, indicating a decrease of 40% from the year-ago reported figure.
TIG’s earnings beat estimates in one of the last four reported quarters, missed in two and met the mark in one.
Image: Bigstock
Here's What to Expect From Coinbase's (COIN) Q3 Earnings
Coinbase Global (COIN - Free Report) is slated to report third-quarter 2022 earnings on Nov 3, after the closing bell. COIN delivered an earnings surprise in one of the last four reported quarters while missing in three.
Let’s see how things have shaped up prior to the announcement.
COIN’s third-quarter results are likely to benefit from the increased adoption of a greater number of crypto assets, higher volatility and rising interest in the entire crypto economy. However, soft crypto market conditions are likely to have been a dampener
Retail, institutional and ecosystem partners are likely to have grown across all key metrics, including Verified Users, retail Monthly Transacting Users (MTUs), Trading Volume, and Assets on Platform.
Ethereum’s trading volume growth is likely to have been aided by an increase in institutional interest, the launch of Ethereum 2.0 staking products, and growth in DeFi and NFT.
Given less active core U.S. retail customers, Retail revenues are likely to have suffered.
COIN estimates sequentially lower MTUs in the third quarter to have weighed on trading volumes and, in turn, put pressure on the top line in the to-be-reported quarter. The Zacks Consensus Estimate for revenues is pegged at $642.8 million for the to-be-reported quarter, indicating a decline of 51% from the year-ago reported number. However, improved subscription and services revenues are likely to have limited the downside. COIN estimates third-quarter subscription and services revenues to rise sequentially, driven by increases in interest income.
Coinbase noted a strong crypto price cycle with high prices of many crypto assets, high levels of volatility, and high interest in crypto across retail and institutional users in the to-be-reported quarter. COIN is a market-leading brand exclusively focused on the cryptoeconomy and thus is expected to have benefited from this tailwind.
However, increased competition is likely to have been an overhang. Operating expense is likely to have increased, given higher trading volumes, account verification fees, payment processing fees and digital advertising spend.
Coinbase expects transaction expenses in the to-be-reported quarter to be in the low to mid-20s, sales and marketing expenses to be about $100 million, and technology and development and general and administrative expenses to be $1 billion.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Coinbase Global this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This is not the case below as you can see.
Earnings ESP: Coinbase Global has an Earnings ESP of -1.11%. This is because the Most Accurate Estimate of a loss of $2.60 is pegged lower than the Zacks Consensus Estimate of a loss of $2.23. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Coinbase Global, Inc. Price and EPS Surprise
Coinbase Global, Inc. price-eps-surprise | Coinbase Global, Inc. Quote
Zacks Rank: Coinbase Global currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
Some stocks from the finance sector with the perfect mix of elements to surpass estimates in their upcoming quarterly releases are as follows:
Enact Holdings (ACT - Free Report) has an Earnings ESP of +1.69% and a Zacks Rank of 3. The Zacks Consensus Estimate for third-quarter 2022 earnings is pegged at 89 cents, indicating an increase of 5.9% from the year-ago reported figure.
ACT’s earnings beat estimates in the last four reported quarters.
EverQuote (EVER - Free Report) has an Earnings ESP of +4.88% and a Zacks Rank #2. The Zacks Consensus Estimate for third-quarter 2022 earnings is pegged at a loss of 41 cents per share, wider than the year-ago loss of 18 cents.
EVER’s earnings beat estimates in three of the last four reported quarters, while missing in one.
Trean Insurance Group has an Earnings ESP of +11.11% and a Zacks Rank of 3. The Zacks Consensus Estimate for third-quarter 2022 earnings is pegged at 9 cents, indicating a decrease of 40% from the year-ago reported figure.
TIG’s earnings beat estimates in one of the last four reported quarters, missed in two and met the mark in one.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.