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COIN Outpaces Industry in 3 Months: Time to Buy the Stock?
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Key Takeaways
COIN stock rises 33% in 3 months, beating industry, sector and the broader market.
The acquisition of Deribit positions Coinbase as a top global crypto derivatives platform by open interest.
Global expansion and diversified offerings help reduce COIN's U.S. reliance and boost long-term potential.
Shares of Coinbase Global Inc. (COIN - Free Report) have rallied 33% over the past three months, outperforming its industry’s growth of 12.3%, the sector’s increase of 7.1% and the Zacks S&P 500 composite’s rise of 7.5%.
Robinhood Markets (HOOD - Free Report) , a crypto-oriented company, has gained 101.7% over the past three months, while Interactive Brokers Group, Inc. (IBKR - Free Report) has gained 20.1% in the same time frame.
As the largest registered crypto exchange in the United States, Coinbase is well-placed to take advantage of increased market volatility and rising crypto asset prices. The United States is being envisioned as a crypto hub. Thus, management remains focused on making Coinbase a platform for companies that are trying to integrate cryptocurrency. While inclusion in the S&P 500 marks a milestone, COIN is contemplating applying for a bank charter.
Image Source: Zacks Investment Research
What’s Driving COIN?
With a focus on growth, Coinbase is actively increasing its market share in both the U.S. spot and derivatives markets, while also expanding its product range and extending its global presence. COIN is broadening its asset offerings to include more cryptocurrencies and tokenized equities.
COIN recently agreed to buy Deribit, the world’s leading crypto-options exchange with over $30 billion of open interest and $1 trillion in trading volume outside the United States in 2024. This buyout, once it materializes, will make Coinbase the number one crypto derivatives platform globally by open interest. To tap the DeFi opportunities on Base, COIN has made cbXRP and cbDOGE live on Base.
Coinbase is actively expanding its international expansion by entering emerging markets like Argentina and India, while also obtaining regulatory approvals in key financial centers such as Spain, France, Singapore and Bermuda. This strategic push is aimed at reducing its reliance on the U.S. market, broadening its revenue streams and expanding its reach among both retail and institutional clients. By targeting regions with underdeveloped or inefficient financial systems, Coinbase is positioning itself to capitalize on untapped opportunities and reinforce its role in the global evolution of the crypto economy.
COIN has a strong focus on making USDC the dominant dollar-backed stablecoin worldwide, which aligns closely with its broader international expansion strategy. A robust liquidity is supporting its ongoing strategic investments aimed at enhancing its service offerings and driving future growth.
To boost crypto utility, Coinbase invests in infrastructure and foundational platforms like Base — Layer 2 solution. Its partnership with Stripe, PayPal is in tandem with the move. Also, the deployment of machine learning, AI and generative AI underscores Coinbase's commitment toward sustained innovation and growth.
Coinbase demonstrates strong fundamentals, closing 2024 with $10.2 billion in resources — cash, cash equivalents and USDC — an increase from $9.8 billion at the end of 2023. Its leverage ratio continues to improve and stands stronger than the industry average, while a higher times interest earned ratio reflects the company’s solid ability to service its debt.
Estimate Revision Trend
The Zacks Consensus Estimate for 2025 and 2026 earnings has moved 52.5% and 16.7% south, respectively, in the last 30 days.
Image Source: Zacks Investment Research
The consensus estimates for 2025 and 2026 earnings of Robinhood Markets and Interactive Brokers Group have also witnessed a southward movement in the past 60 days.
Coinbase Shares Are Expensive
The stock is overvalued compared to its industry. It is currently trading at a price-to-earnings multiple of 28.45, higher than the industry average of 17.52. Its Value Score of F suggests that the stock is not so cheap and indicates a stretched valuation at this moment.
Image Source: Zacks Investment Research
Meanwhile, COIN is cheaper than Robinhood Markets but expensive when compared with Interactive Brokers Group.
How to Play COIN Stock
Volatility in cryptocurrency prices poses a significant risk to Coinbase’s financial health. A decline in the value of Bitcoin, Ethereum, and other digital assets could negatively impact profitability, erode crypto holdings' value and constrain future cash flows. These factors may thus limit liquidity and its ability to meet financial obligations.
Despite these challenges, Coinbase remains focused on growth by strengthening its position in the crypto market, broadening its portfolio with new products, increasing its share of spot trading activity among both retail and institutional clients, and continuously enhancing the trading experience through innovation.
Image: Shutterstock
COIN Outpaces Industry in 3 Months: Time to Buy the Stock?
Key Takeaways
Shares of Coinbase Global Inc. (COIN - Free Report) have rallied 33% over the past three months, outperforming its industry’s growth of 12.3%, the sector’s increase of 7.1% and the Zacks S&P 500 composite’s rise of 7.5%.
Robinhood Markets (HOOD - Free Report) , a crypto-oriented company, has gained 101.7% over the past three months, while Interactive Brokers Group, Inc. (IBKR - Free Report) has gained 20.1% in the same time frame.
As the largest registered crypto exchange in the United States, Coinbase is well-placed to take advantage of increased market volatility and rising crypto asset prices. The United States is being envisioned as a crypto hub. Thus, management remains focused on making Coinbase a platform for companies that are trying to integrate cryptocurrency. While inclusion in the S&P 500 marks a milestone, COIN is contemplating applying for a bank charter.
Image Source: Zacks Investment Research
What’s Driving COIN?
With a focus on growth, Coinbase is actively increasing its market share in both the U.S. spot and derivatives markets, while also expanding its product range and extending its global presence. COIN is broadening its asset offerings to include more cryptocurrencies and tokenized equities.
COIN recently agreed to buy Deribit, the world’s leading crypto-options exchange with over $30 billion of open interest and $1 trillion in trading volume outside the United States in 2024. This buyout, once it materializes, will make Coinbase the number one crypto derivatives platform globally by open interest. To tap the DeFi opportunities on Base, COIN has made cbXRP and cbDOGE live on Base.
Coinbase is actively expanding its international expansion by entering emerging markets like Argentina and India, while also obtaining regulatory approvals in key financial centers such as Spain, France, Singapore and Bermuda. This strategic push is aimed at reducing its reliance on the U.S. market, broadening its revenue streams and expanding its reach among both retail and institutional clients. By targeting regions with underdeveloped or inefficient financial systems, Coinbase is positioning itself to capitalize on untapped opportunities and reinforce its role in the global evolution of the crypto economy.
COIN has a strong focus on making USDC the dominant dollar-backed stablecoin worldwide, which aligns closely with its broader international expansion strategy. A robust liquidity is supporting its ongoing strategic investments aimed at enhancing its service offerings and driving future growth.
To boost crypto utility, Coinbase invests in infrastructure and foundational platforms like Base — Layer 2 solution. Its partnership with Stripe, PayPal is in tandem with the move. Also, the deployment of machine learning, AI and generative AI underscores Coinbase's commitment toward sustained innovation and growth.
Coinbase demonstrates strong fundamentals, closing 2024 with $10.2 billion in resources — cash, cash equivalents and USDC — an increase from $9.8 billion at the end of 2023. Its leverage ratio continues to improve and stands stronger than the industry average, while a higher times interest earned ratio reflects the company’s solid ability to service its debt.
Estimate Revision Trend
The Zacks Consensus Estimate for 2025 and 2026 earnings has moved 52.5% and 16.7% south, respectively, in the last 30 days.
Image Source: Zacks Investment Research
The consensus estimates for 2025 and 2026 earnings of Robinhood Markets and Interactive Brokers Group have also witnessed a southward movement in the past 60 days.
Coinbase Shares Are Expensive
The stock is overvalued compared to its industry. It is currently trading at a price-to-earnings multiple of 28.45, higher than the industry average of 17.52. Its Value Score of F suggests that the stock is not so cheap and indicates a stretched valuation at this moment.
Image Source: Zacks Investment Research
Meanwhile, COIN is cheaper than Robinhood Markets but expensive when compared with Interactive Brokers Group.
How to Play COIN Stock
Volatility in cryptocurrency prices poses a significant risk to Coinbase’s financial health. A decline in the value of Bitcoin, Ethereum, and other digital assets could negatively impact profitability, erode crypto holdings' value and constrain future cash flows. These factors may thus limit liquidity and its ability to meet financial obligations.
Despite these challenges, Coinbase remains focused on growth by strengthening its position in the crypto market, broadening its portfolio with new products, increasing its share of spot trading activity among both retail and institutional clients, and continuously enhancing the trading experience through innovation.
Considering its premium valuation and the subdued sentiment among analysts, maintaining a cautious approach appears prudent for this Zacks Rank #3 (Hold) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.