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Here's Why You Should Retain Coinbase Global (COIN) Stock Now
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Coinbase Global, Inc. (COIN - Free Report) has been in investors’ good books on the back of higher subscription and services revenues, adjusted EBITDA, improved product suite and declining expenses.
Zacks Rank & Price Performance
Coinbase Global currently carries a Zacks Rank #3 (Hold). In the past six months, the stock has gained 23.9% compared with the industry’s growth of 6%.
Image Source: Zacks Investment Research
Business Tailwinds
Coinbase Global is likely to gain from the increased adoption of a greater number of crypto assets, higher volatility and a rise in interest across the entire crypto economy.
Transaction revenues, a major component of COIN’s total revenues, are expected to increase due to enhanced consumer trading volumes. Higher interest income, growing blockchain rewards and increased custodial fees for Coinbase Global are likely to drive subscription and service revenues. The company expects subscription and services revenues to be around $300 million for the third quarter of 2023. COIN expects improved 2023 adjusted EBITDA in absolute dollar terms versus 2022.
The company is successfully delivering on its promises by bringing down operating expenses and achieving efficiency to do more with less. Total expenses plunged 50% year over year in the second quarter. COIN expects transaction expenses to be in the mid-teens as a percentage of net revenues.
COIN believes revenue diversification is a means to grow in the long term so that one macro event does not affect all revenue streams. It launched International Exchange to venture into derivatives markets and is also expanding to new markets, like Canada, Brazil and Singapore. The company is also expecting to grow its subscription and service revenues through the acquisition of One River Asset Management, helping it venture into the asset management business.
The company is also implementing the second phase of crypto adoption, that is, crypto as a technology. The company is making continued investments in technology through products like staking which are expected to increase customer engagement. COIN aims to drive utility in cryptocurrency beyond trading as customers are shifting to other use cases such as payments, savings etc.
Improved transactional revenues coupled with subscription and service segments’ revenues are likely to drive the top line of COIN. An increase in both the average crypto asset prices and total crypto spot market volumes should drive the overall trading volume of COIN.
Key Concerns
There are a few factors that have been impeding the stock’s growth lately.
The company’s performance is dependent on market volatility and asset prices. Hence, the company should try to enhance its product suite, diversify its revenue streams and keep operating expenses low. We believe that a systematic and strategic plan of action will drive growth in the long term.
Arch Capital’s earnings surpassed estimates in each of the last four quarters, the average surprise being 26.8%. The Zacks Consensus Estimate for ACGL’s 2023 earnings and revenues indicates a rise of 38.2% and 30.6%, respectively, from the year-ago actuals. The consensus mark for ACGL’s 2023 earnings has moved 2.3% north in the past 30 days.
The bottom line of Aflac beat estimates in each of the trailing four quarters, the average beat being 7.8%. The Zacks Consensus Estimate for AFL’s 2023 earnings indicates a rise of 12.2% from the year-ago tally. The consensus mark for AFL’s 2023 earnings has moved 1.4% north in the past 30 days.
Chubb’s earnings outpaced estimates in three of the trailing four quarters and missed the mark once, the average surprise being 3.4%. The Zacks Consensus Estimate for CB’s 2023 earnings indicates a rise of 19.3%, while the same for revenues suggests an improvement of 8.8% from the respective year-ago actuals. The consensus mark for CB’s 2023 earnings has moved 0.8% north in the past 30 days.
Shares of Arch Capital, Aflac and Chubb have gained 64.5%, 20.4% and 3.5%, respectively, in a year.
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Here's Why You Should Retain Coinbase Global (COIN) Stock Now
Coinbase Global, Inc. (COIN - Free Report) has been in investors’ good books on the back of higher subscription and services revenues, adjusted EBITDA, improved product suite and declining expenses.
Zacks Rank & Price Performance
Coinbase Global currently carries a Zacks Rank #3 (Hold). In the past six months, the stock has gained 23.9% compared with the industry’s growth of 6%.
Image Source: Zacks Investment Research
Business Tailwinds
Coinbase Global is likely to gain from the increased adoption of a greater number of crypto assets, higher volatility and a rise in interest across the entire crypto economy.
Transaction revenues, a major component of COIN’s total revenues, are expected to increase due to enhanced consumer trading volumes. Higher interest income, growing blockchain rewards and increased custodial fees for Coinbase Global are likely to drive subscription and service revenues. The company expects subscription and services revenues to be around $300 million for the third quarter of 2023. COIN expects improved 2023 adjusted EBITDA in absolute dollar terms versus 2022.
The company is successfully delivering on its promises by bringing down operating expenses and achieving efficiency to do more with less. Total expenses plunged 50% year over year in the second quarter. COIN expects transaction expenses to be in the mid-teens as a percentage of net revenues.
COIN believes revenue diversification is a means to grow in the long term so that one macro event does not affect all revenue streams. It launched International Exchange to venture into derivatives markets and is also expanding to new markets, like Canada, Brazil and Singapore. The company is also expecting to grow its subscription and service revenues through the acquisition of One River Asset Management, helping it venture into the asset management business.
The company is also implementing the second phase of crypto adoption, that is, crypto as a technology. The company is making continued investments in technology through products like staking which are expected to increase customer engagement. COIN aims to drive utility in cryptocurrency beyond trading as customers are shifting to other use cases such as payments, savings etc.
Improved transactional revenues coupled with subscription and service segments’ revenues are likely to drive the top line of COIN. An increase in both the average crypto asset prices and total crypto spot market volumes should drive the overall trading volume of COIN.
Key Concerns
There are a few factors that have been impeding the stock’s growth lately.
The company’s performance is dependent on market volatility and asset prices. Hence, the company should try to enhance its product suite, diversify its revenue streams and keep operating expenses low. We believe that a systematic and strategic plan of action will drive growth in the long term.
Stocks to Consider
Some better-ranked stocks in the broader finance space include Arch Capital Group Ltd. (ACGL - Free Report) , Aflac Incorporated (AFL - Free Report) and Chubb Limited (CB - Free Report) . Arch Capital currently sports a Zacks Rank #1 (Strong Buy), while Aflac and Chubb carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital’s earnings surpassed estimates in each of the last four quarters, the average surprise being 26.8%. The Zacks Consensus Estimate for ACGL’s 2023 earnings and revenues indicates a rise of 38.2% and 30.6%, respectively, from the year-ago actuals. The consensus mark for ACGL’s 2023 earnings has moved 2.3% north in the past 30 days.
The bottom line of Aflac beat estimates in each of the trailing four quarters, the average beat being 7.8%. The Zacks Consensus Estimate for AFL’s 2023 earnings indicates a rise of 12.2% from the year-ago tally. The consensus mark for AFL’s 2023 earnings has moved 1.4% north in the past 30 days.
Chubb’s earnings outpaced estimates in three of the trailing four quarters and missed the mark once, the average surprise being 3.4%. The Zacks Consensus Estimate for CB’s 2023 earnings indicates a rise of 19.3%, while the same for revenues suggests an improvement of 8.8% from the respective year-ago actuals. The consensus mark for CB’s 2023 earnings has moved 0.8% north in the past 30 days.
Shares of Arch Capital, Aflac and Chubb have gained 64.5%, 20.4% and 3.5%, respectively, in a year.