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Surging Earnings Estimates Signal Upside for Coinbase Global (COIN) Stock

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Investors might want to bet on Coinbase Global, Inc. (COIN - Free Report) , as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.

The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this company, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For Coinbase Global, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year.

The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate:

12 Month EPS

Current-Quarter Estimate Revisions

The earnings estimate of $1.11 per share for the current quarter represents a change of +364.29% from the number reported a year ago.

Over the last 30 days, five estimates have moved higher for Coinbase Global compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 110.54%.

Current-Year Estimate Revisions

For the full year, the earnings estimate of $7.18 per share represents a change of +1840.54% from the year-ago number.

The revisions trend for the current year also appears quite promising for Coinbase Global, with five estimates moving higher over the past month compared to no negative revisions. The consensus estimate has also received a boost over this time frame, increasing 105.54%.

Favorable Zacks Rank

Thanks to promising estimate revisions, Coinbase Global currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

While strong estimate revisions for Coinbase Global have attracted decent investments and pushed the stock 8.9% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.


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