Will Coinbase's Q2 2025 Earnings Continue the Beat Streak? A Data-Driven Analysis

As Coinbase Global (COIN) prepares to report Q2 2025 results on August 12, investors are watching closely for signs of resilience in a volatile crypto market. With a history of outperforming earnings expectations and strategic moves like its $2.9 billion acquisition of Deribit, Coinbase is positioned to deliver another surprise—but will it? This analysis dives into the numbers, Zacks' predictive metrics, and valuation to argue why now could be the time to buy ahead of the report.

The EPS Surprise Track Record: A Bullish Signal

Coinbase has a proven knack for beating earnings estimates. Over the past two quarters, its average earnings surprise was a robust 39.8%, with a 4.86% beat in Q1 2025 and a staggering 74.74% beat in Q4 2024. This consistency suggests management's ability to navigate crypto market cycles, even as transaction revenue faces headwinds.

Note: A visual analysis would show whether stock price dips or rises post-earnings, though COIN's May 2025 Q1 report saw a 3.48% drop—a potential buying opportunity.

Zacks' Earnings ESP: A 70% Beat Probability?

While Coinbase carries a Zacks Rank #3 (Hold) as of July 2025, its Zacks Earnings ESP score of +54.65% is a red flag for optimists. This metric measures the likelihood of an earnings beat based on analyst revisions. A positive ESP suggests analysts are increasingly bullish, and historically, stocks with a positive ESP and a Zacks Rank #3 or better have a 70% chance of beating estimates.

This math matters: If Coinbase's Q2 EPS of $1.51 (vs. $0.14 in 2024) is exceeded, the stock could see a post-earnings rally similar to its 2023 performance, when a 30% beat propelled shares higher.

Strategic Moves and Valuation: A Solid Foundation

Coinbase's $2.9 billion acquisition of Deribit, Europe's largest crypto derivatives exchange, is a strategic win. Deribit's advanced trading infrastructure and regulatory compliance in key markets could boost Coinbase's institutional appeal. Meanwhile, the growth of its USDC stablecoin—now at a $60 billion market cap—highlights its leadership in decentralized finance (DeFi).

On valuation, Coinbase's price-to-sales (P/S) ratio of 3.2x (based on Q1's $2 billion revenue) is reasonable compared to peers like PayPal (P/S 6.5x) or Square (P/S 5.8x). Even with a Zacks Rank #3, the company's $10.2 billion in USD reserves and reduced debt levels signal financial strength.

Risks and Considerations

Bearish arguments center on crypto market volatility and declining transaction revenue. Coinbase's Q1 transaction revenue fell 18% year-over-year, reflecting broader industry headwinds. However, its shift toward fee-based services (e.g., custody for institutions) and the Deribit acquisition aim to diversify revenue streams.

Investment Thesis: Buy Ahead of Earnings

Despite the Zacks Hold rating, the data leans bullish:
1. EPS Beat Likelihood: A 54.65% ESP suggests a high probability of surpassing $1.51.
2. Valuation: At current levels (~$199.32 pre-earnings), COIN offers upside if growth metrics (e.g., institutional adoption, USDC usage) shine in the report.
3. Strategic Momentum: Deribit and Base platform investments position Coinbase to lead in regulated crypto ecosystems.

A visual would show consistent beats, reinforcing the trend.

Final Call: Buy Before the Report

While risks exist, the combination of Coinbase's EPS beat history, Zacks' bullish ESP, and strategic progress makes it a compelling buy ahead of August's earnings. Investors should consider scaling into positions before August 12, with a focus on long-term growth in crypto adoption and institutional demand.

Actionable Advice:
- Buy: Accumulate COIN shares in the weeks before the report, targeting support at $180–$190.
- Hold: If the Zacks #3 ranking concerns you, wait for post-earnings clarity.
- Avoid: Only if crypto寒冬 returns; monitor macro sentiment closely.

The crypto landscape is tough, but Coinbase's execution so far—and its incentives to overdeliver—suggest this earnings report could be a turning point.