Coinbase Global, Inc. (NASDAQ:COIN) investors will be delighted, with the company turning in some strong numbers with its latest results. Coinbase Global outperformed on both revenues and the expected loss per share, with revenues of US$773m beating estimates by 18%. Statutory losses were US$0.34, 75% smaller thanthe analysts expected. Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for Coinbase Global
Following the latest results, Coinbase Global’s 24 analysts are now forecasting revenues of US$2.91b in 2023. This would be an okay 7.1% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 65% to US$3.36. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$2.83b and losses of US$3.94 per share in 2023. So it seems there’s been a definite increase in optimism about Coinbase Global’s future following the latest consensus numbers, with a favorable reduction in the loss per share forecasts in particular.
There was no major change to the consensus price target of US$67.73, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Coinbase Global at US$200 per share, while the most bearish prices it at US$27.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Coinbase Global’s revenue growth is expected to slow, with the forecast 9.6% annualised growth rate until the end of 2023 being well below the historical 40% p.a. growth over the last three years. Compare this to the 624 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 8.6% per year. Factoring in the forecast slowdown in growth, it looks like Coinbase Global is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at US$67.73, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn’t be too quick to come to a conclusion on Coinbase Global. Long-term earnings power is much more important than next year’s profits. At Simply Wall St, we have a full range of analyst estimates for Coinbase Global going out to 2025, and you can see them free on our platform here..
We don’t want to rain on the parade too much, but we did also find 2 warning signs for Coinbase Global that you need to be mindful of.
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Find out whether Coinbase Global is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
