Wall Street Projects 48% Decline In COIN Q1 EPS Despite Bull Run

Market analysts have predicted a significant drop of 48% in Coinbase's GAAP EPS in the first quarter of FY24, despite the ongoing surge in the crypto market. As Coinbase Global Inc.'s ( COIN ) latest quarterly earnings report approaches, Wall Street analysts have provided their forecasts for the cryptocurrency exchange platform. Despite the ongoing bull run in the crypto market, expectations for the Coinbase Q1 2024 report suggest a substantial decline in GAAP earnings per share (EPS) of 48% compared to the previous quarter.

For the first quarter of FY24, analysts are predicting EPS of $0.54 for Coinbase ( COIN ), down from $1.04 in Q4 FY23, indicating a massive decline of over 48% quarter-over-quarter. Some have questioned the Wall Street estimates, considering that the first quarter of FY24 experienced a significant bull run that even caused Coinbase's servers to crash.

Looking ahead, the projections for Coinbase's performance reveal a mixed outlook. Revenue growth is expected to maintain momentum, with a projected 54% year-over-year (YoY) increase in 2024, followed by a more modest 0.5% growth in 2025. Meanwhile, EBITDA (earnings before interest, taxes, depreciation, and amortization) is anticipated to surge by an impressive 120% YoY in 2024, but then face a 10% decline in 2025.

In addition, the situation becomes more nuanced when examining net income growth projections. Analysts anticipate an extraordinary 300% YoY surge in 2024 for Coinbase's net income. However, they also forecast a subsequent 36% decline in 2025, which could signal a potential end of the ongoing bull market.

Coinbase ( COIN ) reported a profit of $273.4 million for the three months ending December 31, compared to a $557 million loss a year before. Analysts, according to LSEG data, had expected a loss of $0.1 per share. However, the surge in interest in cryptocurrencies led Coinbase Global to unveil a new chapter on Thursday, marking its first quarterly profit since 2021, fueled by strong trading volumes.

During the same period, the company also recorded a notable 64% surge in transaction revenue to $529.3 million. The stronger-than-expected outcome propelled the company's shares upward the day after the announcement, with the Coinbase ( COIN ) stock soaring nearly 15% in the pre-market session that day. Additionally, Coinbase ( COIN ) revealed that its subscription and services division encompasses activities beyond trading.

Moreover, the crypto exchange provided an optimistic outlook for a successful first quarter this year. It forecasted sales for the segment to range between $410 million and $480 million, surpassing the LSEG estimate of $356.22 million.

However, the results showed a decline in Coinbase's transaction revenue to $1.5 billion in 2023, marking a 36% year-on-year decrease. Furthermore, total trading volume plummeted nearly 44% compared to the previous year, standing at $468 billion.