Coinbase (COIN) Earnings on Deck

Coinbase was inadvertently left off the earnings sheet this week. We are Bullish.

• Earnings Score: +60

• Trade: Coin Flip Bullish

• Earnings Date: Thursday, May 2 after the bell

Here's a breakdown of what we're watching...

Last quarter COIN shares popped +10% after the company posted its first profit in 2 years, boosted largely by transaction revenue from increased crypto interest and higher crypto valuations.

COIN's stock is up more than +280% YoY but has pulled back ~15% as the price of Bitcoin settles near 63k following its massive rise higher in February.

This pullback could serve as excellent fodder to send COIN shares higher after earnings -- especially coupled with strength from LikeFolio metrics.

We're bullish for 3 major reasons:

• Web visits are up more +52% YoY, more the double the growth rate we observed last quarter (+22% YoY) -- this confirms retention and increased consumer engagement. Mentions have also logged double-digit growth over the last quarter.

• The approval of spot Bitcoin ETFs (earlier in January) is actually good news for Coinbase. Most spot Bitcoin ETFs use a third-party custodian to store their Bitcoin, similar to how spot gold ETFs store their physical gold with a third-party custodian. Of the 10 spot Bitcoin ETFs trading earlier this year, eight employ Coinbase (COIN) as their Bitcoin custodian.

• Most importantly, we are Bullish on Bitcoin. The concept of decentralized finance (DeFi) continues to be one of the most meaningful trends we are following. Consumer interest in Bitcoin continues to rise, up +55% YoY but well below 2021 levels. We think if and/or when this gap fills, the price of Bitcoin is only set to push higher, bringing intermediaries like COIN along with it.

We like this name long-term, and are also buyers of near-term dips.