Crypto stocks Strategy (MSTR) and Coinbase Global (COIN) are both poised to release their quarterly results on October 30, drawing considerable interest from investors. Both companies have demonstrated strong performance over the years, largely driven by the surging prices of cryptocurrencies, notably Bitcoin (BTC-USD). However, they face distinct macroeconomic and company-specific hurdles that could emerge more prominently following their earnings announcements.
### MSTR’s Forecast and Performance
Wall Street analysts anticipate that Strategy will report a diluted loss of $0.10 per share and revenues of $116.65 million. This represents a notable improvement compared to the same quarter last year, where the reported loss was $1.72 per share on $116.07 million in sales. Despite these positive trends, it is important to note that Strategy has only surpassed analysts’ expectations twice in the last eight quarters.
The company’s business model revolves around providing enterprise analytics software and services globally, which offers a steady revenue stream. However, Strategy’s investment in Bitcoin is central to its corporate strategy. The necessity to report unrealized gains and losses from its Bitcoin holdings significantly influences its net income and earnings per share, leading to volatility during quarterly results.
Recently, a regulatory filing disclosed that Strategy sold preferred stock to raise $43.4 million, funding the acquisition of an additional 390 Bitcoins at an average price of $111,117 each. This brings the company’s total Bitcoin holdings to around 640,808, valued at approximately $47.44 billion.
### Analyst Insights on MSTR
Ahead of the earnings release, TD Cowen analyst Lance Vitanza maintained a Buy rating on MSTR stock, with a price target of $620. This projection implies a significant upside potential of 117.8% from current levels. Vitanza forecasts that the company could hold nearly 900,000 BTC by 2027, accounting for over 4% of the total Bitcoin supply. He notes favorable long-term trends for Bitcoin’s acceptance and potential regulatory easing regarding banks investing in digital currencies.
### COIN’s Growth Expectations
In contrast, analysts expect Coinbase to demonstrate robust growth in Q3, predicting diluted earnings per share of $1.15 on sales of $1.80 billion. This marks a substantial increase from the prior year, where the company reported earnings of $0.28 on $1.21 billion in sales. Coinbase has outperformed consensus estimates in five of the last eight quarters.
As one of the largest cryptocurrency exchanges and fintech platforms globally, Coinbase operates a vertically integrated model that allows it to function as a broker, market maker, and custodian. Its performance is closely tied to cryptocurrency price fluctuations, yet it also benefits from transaction fees, stablecoin service charges, and revenue generated from staking and yield services on USDC.
Recently, Coinbase entered a strategic partnership with Citigroup, enabling the bank’s institutional clients to deposit and withdraw fiat currencies through the Coinbase platform, further extending its services.
### Analyst Perspectives on COIN
JPMorgan analyst Ken Worthington has upgraded his rating on COIN from Hold to Buy, raising his price target from $342 to $404, suggesting a 13.7% upside potential. Worthington identifies two key growth drivers for Coinbase: the anticipated launch of a Base token for Coinbase’s Layer 2 blockchain, projected to contribute an additional $12 billion to $34 billion in value, and higher yields for USDC available to Coinbase One subscribers, which could add approximately $1.00 to the annual EPS.
### Comparative Analysis: MSTR vs. COIN
Using the TipRanks’ Stock Comparison Tool, an evaluation of MSTR and COIN reveals distinct analyst preferences. Currently, MSTR holds a “Strong Buy” consensus rating, along with a higher upside potential of 89.8% over the next twelve months, indicating strong investor sentiment surrounding the stock.
The upcoming earnings releases from both companies will be a pivotal moment, potentially shaping the trajectories of each stock in a volatile cryptocurrency market. As investors await the results, the question remains: which stock will prove to be the better buy in a fast-evolving landscape?
