Earnings season continues this week with financial reports from various and mixed companies like NVIDIA, Coinbase, and eBay. With these companies stemming from different sectors, traders and investors alike may want to keep an eye out for the upcoming reports as these can provide insight into the state of the economy. Here’s what you can expect from this week’s earnings:
Coinbase Earnings Report: Is There Still a ‘Crypto Winter’?
Crypto exchange giant, Coinbase (COIN) is expected to report its financial earnings on Tuesday the 21st of February after the ring of the bell. While there is no secret that the cryptocurrency sector suffered ostensible losses last year with major cryptocurrencies like Bitcoin (BTCUSD) and Ethereum (ETHUSD) falling by more than 65% and 68.2% respectively, it seems that 2023 is treating Crypto a tad differently with the same major cryptocurrencies respectively rising over 47% and 42.9% as of the time of the writing. Still, the crypto industry as a whole has to grapple with numerous challenges ranging from inflation to regulatory scrutiny this year too, which may distort its recent slight rebound.
Due to FTX’s collapse which took the market by storm in November 2022, coupled with the increased regulatory scrutiny on cryptocurrencies, and high inflation and interest rate hikes, which can hurt assets like cryptocurrencies, the crypto sector may still have to face some headwinds. Moreover, analysts and market watchers seem to believe that the SEC regulations on crypto may result in prolonged difficulties for cryptocurrency exchanges, like Coinbase.
However, it is worth mentioning that Coinbase rose by a whopping 93.9% thus far in 2023. Nonetheless, since the crypto sector is still facing the aforementioned challenges, and the earnings report is set to reflect the company’s fourth quarter of last year’s trajectory, it might not come as a surprise to learn that the general market sentiment surrounding Coinbase's earnings is anything but positive. Net revenue is expected to have dropped by 77% YoY in the fourth quarter and annual revenue is expected to have slid by 57$ landing in at $3.2 billion. Whether or not these speculations will hold true is yet to be determined, and regardless of the results, tomorrow’s earnings report could foretell a lot about the direction of the crypto market in the upcoming months. (Source:Yahoo Finance)
NVIDIA: Can the Chip Giant Recoup Some of 2022’s Losses?
GPU-maker and one of the biggest players in the tech field, NVIDIA (NVDA) is scheduled to release its earnings on Wednesday, February 22nd after the ring of the bell. While NVIDIA along with other big tech companies struggled to keep pace with 2022’s financial challenges as inflation and ensuing rate hikes stunted big tech companies’ growth leading it to wipe over half of its value, it seems that in 2023, things are looking up for the chip giant. As it stands, NVIDIA was able to recoup some of last year’s losses by gaining about 49.4%.
Since industry peer, AMD (AMD) has already exceeded estimates with its earnings results earlier this month, traders may be looking back at this in anticipation of NVIDIA's earnings release on Wednesday. Despite AMD’s better-than-expected earnings report and NVIDIA’s 2023’s gains, analysts seem to be more apprehensive when it comes to NVIDIA’s upcoming earnings. EPS estimates come in at $0.81 which is a decline of about 39% from the YoY figures while revenue is believed to come in at $6 billion which is 21% below YoY data. It is likely that the company's earnings report will reveal a lot about the state of big tech and chipmakers, so traders will have to wait and see what the company discloses in its earnings call.
eBay: How Is the E-Commerce Industry Faring?
American multinational e-commerce mogul, eBay (EBAY) is also scheduled for an earnings release this Wednesday the 22nd of February following market close and its results can provide valuable insight into last year's consumer spending trends. While so far in 2023, eBay spiked by 14.4%, in 2022 it dipped by 37.9% as it grappled with challenges including inflation which put pressure on consumers’ wallets. Nevertheless, it is also these challenges that seem to have ushered forth a need for pre-owned vintage goods that may be more valuable and affordable to buyers and sellers in an economically challenging atmosphere like that of last year. As such, the company may have been able to survive some of the difficulties with its focus on pre-owned items rather than new ones.
Despite this, eBay is still far from optimistic about the economic prospects as it believes that these are likely to persist in 2023. In addition to inflation and a slowdown in consumer spending, the war in Ukraine which resulted in an energy crisis in Europe as well as workforce disruptions in the UK is believed to have stunted eBay’s Q4 2022’s growth as well. Moreover, the company also announced that it plans to lay off about 500 of its employees earlier this month.
Accordingly, analysts expect the company to report revenue of $2.46 billion compared to the same quarter last year whereby it reported $2.6 billion. In addition, analysts project an EPS of $1.06. Those who are interested in trading e-commerce stocks and who want to understand the overall growth of this sector may want to keep a keen eye on Wednesday’s data.
All in all, this week marks another important milestone for the market as the scheduled earnings reports could reflect the state of the economy, in general, and the market, in particular. Traders will have to wait and see how the data plays out.