To The Moon

$Coinbase Global, Inc.(COIN)$

Over the weekend, everyone talked about the Trump trade, now that we know who is going to become the next president, the bull market is back for now. Many people flooded into Trump stock, $Coinbase Global, Inc.(COIN)$ had been benefit from the election.

Earnings Overviews

Shares of Coinbase dropped by 14.2% this week after the company released its Q3 2024 earnings report. The results were not particularly strong, and it seems that the market had set overly high expectations for the company. While Coinbase's growth is steady in the right areas, it hasn't reached an exceptional level yet.

Challenges

The company is facing a decline in trading volume, which significantly impacts its revenue, as this is the primary source of its earnings. This situation can make results look disappointing, even when the overall picture isn't all that bad.

Regulatory Scrutiny: Coinbase is under significant regulatory pressure, especially from the SEC, which has accused the company of acting as an unregistered securities exchange. Market Volatility, The cryptocurrency market is highly volatile, which can impact Coinbase's revenue and profitability. Intense competition from other cryptocurrency exchanges and financial services can affect Coinbase's market share. Day-to-day operations challenges, system outages or errors had impact on Coinbase's performance in the past

To clarify, I'm more focused on Coinbase's long-term potential rather than short-term results. If you're looking for short-term trades, this isn't the analysis for you. However, if you're interested in stocks with the potential for significant growth over the next decade, Coinbase fits that profile.

Financial Breakdown

Let's break down the financials. The company reported $1.2 billion in revenue for the quarter, with a net income of $75 million, continuing its streak of profitability. Notably, Coinbase's subscription and services revenue reached $556 million, and the company announced a $1 billion share repurchase program. This indicates that Coinbase is in a strong financial position, holding a large amount of cash on its balance sheet.

However, revenue from customer transactions, Coinbase's largest source of income, fell by nearly 50% from the previous quarter due to a slowdown in crypto market activity. This is a reminder that trading volatility typically benefits Coinbase, and the current downturn has resulted in lower earnings.

Subscription and Services Growth

Subscription and services revenue, on the other hand, is steadily growing. Coinbase is making money through blockchain rewards, stablecoin transactions, and other services. While trading will remain a part of the business, the future growth for Coinbase lies in these innovative areas. The company's growth in blockchain infrastructure and stablecoin-related services is the focus for long-term investors.

Future Outlook

Coinbase has a solid balance sheet with $8.2 billion in cash, and the company is now looking to repurchase shares, especially if the stock price continues to fall. Despite the drop in stock price following the earnings report, there’s still a lot of potential for Coinbase's future as blockchain and cryptocurrency continue to evolve. While the next year or two may be volatile, the long-term outlook remains strong, and Coinbase is well-positioned to lead in the digital financial infrastructure space.

Short Term forecast

Based on current analyst forecasts, Coinbase's stock has a potential upside, with some price targets reaching as high as $345. However, the average price target is around $246.28, indicating a possible downside from the current price.