Coinbase Global (COIN – Free Report) is slated to report second-quarter 2021 results on Aug 10, before the opening bell. The company delivered a negative earnings surprise of 21.39% in the last reported quarter.
Let’s see how things have shaped up prior to the announcement.
Second-quarter results are likely to benefit from increased adoption of a greater number of crypto assets, and increased volatility coupled with increased interest across the entire cryptoeconomy. Retail, institutional and ecosystem partner are likely to have grown across all key metrics including Verified Users, retail Monthly Transacting Users (MTUs), Trading Volume, and Assets on Platform.
Increase in institutional interest, launch of Ethereum 2.0 staking products in April 2021, and growth in DeFi are likely to have aided Ethereum trading volume growth.
Retail transaction revenues are expected to have benefited from both increase in MTUs and elevated trading volumes per MTU.
The company noted strong crypto price cycle with high prices of many crypto assets, high levels of volatility and high interest in crypto across retail and institutional users in the second quarter.
However, increased competition is likely to have been an ovehang. Operating expense is likely to have increased, given higher trading volumes, account verification fees and payment processing fees.
What the Zacks Model Says
Our proven model does not conclusively predict an earnings beat for Coinbase Global this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case as you can see below.
Earnings ESP: Coinbase Global has an Earnings ESP of +6.64%. This is because the Most Accurate Estimate of $2.41 is pegged higher than the Zacks Consensus Estimate $2.26. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Coinbase Global currently carries a Zacks Rank of 4 (Sell).
Stocks from the same space that beat the respective Zacks Consensus Estimate for second-quarter 2021 earnings are as follows: