Should You Add Coinbase Stock to Your Portfolio Ahead of Q1 Earnings?

For Immediate Release

Chicago, IL – May 6, 2025 – Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets.

Here are highlights from Monday's Analyst Blog:

Should You Add Coinbase Stock to Your Portfolio Ahead of Q1 Earnings?

Coinbase Global COIN is expected to report first-quarter 2025 earnings on May 8. The company's earnings are expected to improve from the previous quarter.

The Zacks Consensus Estimate for COIN's first-quarter revenues is pegged at $2.2 million, indicating a 33.4% increase from the year-ago reported figure.

The consensus estimate for earnings is pegged at $2.06 per share. The Zacks Consensus Estimate for COIN's first-quarter earnings has moved 2.4% down in the past seven days. The estimate suggests a year-over-year increase of 23.6%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

COIN's Decent Earnings Surprise History

COIN's earnings beat the Zacks Consensus Estimates in three of the trailing four quarters and matched in one, the average surprise being 46.15%.

What the Zacks Model Unveils for COIN

Our proven model does not conclusively predict an earnings beat for Coinbase 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), which increases the chances of an earnings beat. This is not the case, as you can see below.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: COIN has an Earnings ESP of -5.23%. This is because the Most Accurate Estimate of $1.93 is pegged lower than the Zacks Consensus Estimate of $2.06.

Zacks Rank: COIN currently has a Zacks Rank #3.

You can see the complete list of today's Zacks #1 Rank stocks here.

Coinbase Global Price

Coinbase Global price - Chart by WebDemonstella

Factors Likely to Shape COIN's Q1 Results

The first-quarter performance of Coinbase is likely to have benefited from increased trading volume due to higher volatility. Crypto trading remains a major revenue driver for COIN. The Zacks Consensus Estimate for trading volume is pegged at 404 million, indicating a 29.4% increase from the year-ago reported quarter. Both consumer and institutional trading are likely to have increased in the to-be-reported quarter.

The intensifying focus on international expansion, growth of derivatives and spot trading and integration of USD Coin into the crypto economy are likely to have fueled the two largest revenue streams — trading fees and Stablecoins.

Higher crypto asset volatility, coupled with improved crypto asset prices, is likely to have driven the growth of Coinbase One subscribers as well as unit inflows across staking, custody, and USDC assets. The Zacks Consensus Estimate for transaction revenues is pegged at $1325 million, indicating an upside of 23% from the year-ago reported quarter.

Coinbase also expects transaction expenses to be in the mid-to-high teens as a percentage of net revenues.

Subscription and services revenues are likely to have been aided by blockchain rewards revenues, Stablecoin revenues and Coinbase One subscription revenues.

A gradual shift to subscription and services revenues, which ensures more stability, from transaction fee revenues is likely to have driven an upside. Coinbase expects first-quarter subscription and services revenues to be in the range of $685-$765 million. The Zacks Consensus Estimate is pegged at $707 million.

Coinbase expects technology and development and general and administrative expenses to be in the range of $750-$800 million, which indicates a rise in variable expenses related to elevated trading volume as well as payroll taxes and headcount.

An increase in digital marketing spending is likely to have increased sales and marketing expenses. COIN projects sales and marketing expense to be between $235 million and $375 million due to potential variability in performance marketing and USDC assets in the product suite.

Technology investments aimed at improving operational efficiency, combined with disciplined cost control, are likely to have led to lower expenses and enhanced profit margins. COIN expects technology & development and general & administrative expenses to increase to $690-$730 million.

COIN's Price Performance & Valuation

The stock is down 26.4% in the first quarter of 2025. In comparison, the industry, sector and the S&P 500 have risen 11.8%, 13.2% and 9.9%, respectively.

The stock is currently trading at a price-to-earnings multiple of 22.47, higher than the industry average of 1