Is Coinbase a Buy Now?
COIN has benefited from a resurgence in the crypto market this year.
avatar
Mike Sakuraba graduated with double major of English and Economics. Part time writer, part time investor, full time dad. Mike loves writing about technology, sports, and investing.
2023-05-06 11:30

Coinbase Soars Higher After Earnings Report
Coinbase (NASDAQ: COIN) shareholders are breathing a sigh of relief following the company’s earnings report on Thursday. Shares of COIN surged by more than 18% on Friday after the crypto exchange topped Wall Street estimates for the quarter. Coinbase has been under immense pressure from US regulators as the crackdown on the crypto industry continues to weigh on investors.
Is Coinbase a Buy Now?
Despite the stock returning more than 73% so far in 2023, it is still down nearly 50% over the past year. COIN has benefited from a resurgence in the crypto market this year, with the prices of Bitcoin rising by more than 77% since the start of the year.

As for Coinbase’s earnings, on the surface, it appears to be an impressive quarter. Revenue for the company rose by 23% on a sequential quarterly basis to $773 million. This came firmly higher than the consensus estimates of $655 million. Earnings also came in well above estimates as Coinbase reported a loss of $0.34 per share compared to expectations of a loss of $1.45 per share. Overall, it was a pleasant surprise for Coinbase which has been in the headlines for all of the wrong reasons this year.

Wall Street Analysts Aren’t as Optimistic for Coinbase
The 18% rebound on Friday could have also been a bit of a short squeeze caused by short sellers closing their positions. With a short float percentage of more than 22%, Coinbase was heavily shorted following the multiple lawsuits against the company, as well as the crackdown from the SEC. Let’s just say the earnings were good, but they weren’t that good.

Wall Street analysts seem to agree as both Goldman Sachs and JPMorgan remain bearish on the stock. Goldman analysts specifically point to the ongoing regulatory uncertainty surrounding Coinbase’s future in the United States. Rumours have been swirling that Coinbase is looking to move its operations internationally after the US has made it clear that crypto companies must abide by their rules. So far, the United Kingdom and the Bahamas have been two locations linked to Coinbase’s future.

Goldman Sachs reiterated its Sell rating for Coinbase but did provide a small updated boost to its 12-month price target for the stock. The analysts raised the target from $40 to $45, while still maintaining a bearish sentiment for at least the next 12 months.

Is Coinbase Stock a Buy?
I would say it certainly isn’t after an 18% gain in one session. Even after the rebound on Friday, the stock remains below both the key 50-day and 200-day moving averages. Until it is able to reclaim those levels, Coinbase remains on a long-term downtrend.

Then there is the matter of where Coinbase will be located in the future. If the rumours are true, Coinbase could be leaving the US altogether. Considering a vast majority of its customers are based in the US, that could put a serious dent in Coinbase’s revenue. As I said, the positive quarter was a nice sign for Coinbase, but the massive gains were likely short sellers covering their shorts. Coinbase remains on my watchlist, but I still don’t have any confidence in owning it right now.


Disclaimer: I have no positions in any of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. All information should be independently verified and should not be relied upon for purposes of transacting securities or other investments. See terms for more info.

Rate this article

positive
negative
Published On
2023-05-06 11:30

avatar
About the Author
Mike Sakuraba graduated with double major of English and Economics. Part time writer, part time investor, full time dad. Mike loves writing about technology, sports, and investing.


buy-coffee
You've read 1 article in the last year
..thank you for supporting us and for visiting our site. Unlike many other sites, The Dog of Wall Street is available for everyone to read. Our focus is to provide great content for free. Do you like what we are doing? Buy us a cup coffee. It is the fuel that keeps us going..

Looking Ahead to Tesla's Earnings: What Can We Expect?
Is there any stock that has been more talked about than Tesla (NASDAQ: TSLA) as of late? It’s a company that is always in the spotlight but the stock is under some heavy scrutiny this year and deservedly so.
By Mike Sakuraba | 1 month ago

2 Stocks to Load Up On During This Correction
Another volatile week for markets and investors are starting to feel a little uncomfortable.
By Mike Sakuraba | 1 month ago

2 Earnings to Watch for Next Week
This article is merely meant to talk about two companies that I’ll have my eyes on for earnings.
By Mike Sakuraba | 1 month ago

2 Stocks That Could Explode in Q2
Here are two stocks that I think could explode in the second quarter.
By Mike Sakuraba | 1 month ago

2 Trillion Dollar Companies in the Making
One thing for certain about these two companies is that I see the potential in how they can grow.
By Mike Sakuraba | 1 month ago

Is Tesla Back? Has TSLA Stock Finally Bottomed?
Tesla Stock Analysis: Robo Taxis to the Rescue?
By Mike Sakuraba | 1 month ago

2 Stocks to Buy During an April Pullback
Here are 2 stocks I’d buy during an April pullback.
By Mike Sakuraba | 1 month ago

TSM Stock: Is This The True Winner of the AI Race?
TSM’s stock has gained nearly 40% this year which is about half of NVIDIA has returned.
By Mike Sakuraba | 1 month ago