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Coinbase Global Inc (COIN - Free Report) shares are trading at a premium to the industry. Its 12-month forward price-to-earnings of 56.69X is much higher than the industry average of 23.82X, the broader sector’s 16.94X and the Zacks S&P 500 composite’s 22.93X.
Its Value Score of F suggests that the stock is not so cheap and indicates a stretched valuation at this moment.
COIN, the crypto leader, is poised to benefit from listing a broader range of crypto assets and tokenized equities, international expansion, strategic buyouts and increased volatility. It is continually undertaking strategic growth initiatives, fortifying its on-chain consumer strategy by building on DeFi-powered consumer applications, launching a unique equity index future and joining traditional finance with crypto, among others.
Image Source: Zacks Investment Research
COIN: An Outperformer
Shares of Coinbase have rallied 43.8% year to date compared with the industry’s growth of 0.4%, the sector’s rise of 10.8% and the Zacks S&P 500 composite’s gain of 12.2%.
Image Source: Zacks Investment Research
Shares of Robinhood Markets (HOOD - Free Report) and Interactive Brokers Group, Inc. (IBKR - Free Report) , both crypto-oriented companies, have gained 272.9% and 56.2% year to date, respectively.
Robinhood has evolved from a brokerage firm mainly trading in digital assets to a more mature and diversified entity, striving to widen its market and reach. Robinhood continues to diversify its product base to acquire new clients and gain market share.
Interactive Brokers is known for its advanced electronic trading platforms and global market access. The company leverages proprietary systems to automate nearly every aspect of the brokerage process — from trade execution and risk management to compliance and customer onboarding —enabling it to operate with minimal human intervention and significantly lower costs than traditional brokers.
Should you consider adding COIN to your portfolio only based on positive price movements? Let’s delve deeper and find out the factors that can help investors decide whether it is a good time to add COIN stock to their portfolios.
The Case For COIN Stock
CEO Brian Armstrong envisions Coinbase to be the “everything exchange”; thus, this crypto exchange has been constantly working toward achieving the same. It has been building a compelling portfolio consisting of varied crypto assets. Recently, it listed Linea (LINEA), Noice (NOICE) and Syndicate (SYND), all focused on two major blockchains, and has launched two crypto assets - Centrifuge (CFG) and TROLL (TROLL). Earlier, it listed two new non-dollar stablecoins- AUDD (Australia) and XSGD (Singapore). All these endeavors mark COIN’s effort to bring stablecoins mainstream.
COIN applied for a national trust company charter from the U.S. Office of the Comptroller of the Currency. If approved, COIN can offer custody and related banking services across the nation. COIN can also pursue payments and related services, which will propel increasing institutional adoption. COIN has also launched a unique equity index future, giving exposure to Mag 7 stocks as well as to crypto ETFs, iShares Bitcoin Trust and iShares Ethereum Trust.
COIN stands to gain from increased volatility and rising prices in the crypto asset market. The accelerating adoption of stablecoins is poised to further boost revenues. Coinbase stands to gain from strengthened banking relationships, new licenses and the introduction of customized products for diverse customer segments. With a clear growth strategy, the company is increasing its market share in both the U.S. spot and derivatives markets, broadening its product suite and expanding its presence globally.
While the Derbit acquisition establishes Coinbase as a global force in futures, options and perpetuals, deals like Liquifi and One River Digital broaden COIN's tokenization and institutional services.
COIN added DEX trading to its app for U.S. users, except New York State. This expands access from 300 tokens to potentially millions of assets instantly. The DEX integration supports COIN’s goal of a unified and centralized DeFi platform.
A strong liquidity position enables continued strategic investments aimed at enhancing offerings and driving sustainable growth. Coinbase is a fundamentally strong company with solid liquidity and decreasing debt over the past several quarters. Its total debt capital ratio has been improving. However, Coinbase recently priced $2.6 billion convertible notes, which increases concerns about dilution and financial leverage.
COIN’s Return on Capital
COIN’s return on equity (ROE) in the trailing 12 months was 16%, lower than the industry average of 16.1%.
The return on invested capital in the trailing 12 months was 10.2%, which compared favorably with the industry average of 5.1%. This reflects the insurer’s efficiency in utilizing funds to generate income.
Muted Analyst Sentiment for COIN
The Zacks Consensus Estimate for 2025 and 2026 earnings has moved one cent south each in the past 30 days.
Image Source: Zacks Investment Research
Though the Zacks Consensus Estimate for 2025 and 2026 revenues implies a 7.6% and 9.6% year-over-year increase, respectively, the same for 2025 and 2026 earnings suggests a 0.7% increase but a 22.6% year-over-year decrease, respectively.
How to Play COIN Stock
Coinbase’s efforts to accelerate growth in the crypto market, increase market share in spot trading on consumer and institutional trading platforms and improve trading experience, along with continued innovation, should help it accelerate growth.
However, crypto asset price risk and lower volatility could adversely impact Coinbase’s operating results. A decline in the market price of Ethereum, Bitcoin and other crypto assets could hurt earnings, the carrying value of crypto assets and future cash flows. This may also affect liquidity and the company’s ability to meet ongoing obligations.
Given a premium valuation, projected declines in earnings, muted analyst sentiment and a VGM Score of F, we stay cautious on this Zacks Rank #3 (Hold) stock presently.
Image: Bigstock
COIN Stock Trading at a Premium to Industry: What Should Investors Know?
Key Takeaways
Coinbase Global Inc (COIN - Free Report) shares are trading at a premium to the industry. Its 12-month forward price-to-earnings of 56.69X is much higher than the industry average of 23.82X, the broader sector’s 16.94X and the Zacks S&P 500 composite’s 22.93X.
Its Value Score of F suggests that the stock is not so cheap and indicates a stretched valuation at this moment.
COIN, the crypto leader, is poised to benefit from listing a broader range of crypto assets and tokenized equities, international expansion, strategic buyouts and increased volatility. It is continually undertaking strategic growth initiatives, fortifying its on-chain consumer strategy by building on DeFi-powered consumer applications, launching a unique equity index future and joining traditional finance with crypto, among others.
Image Source: Zacks Investment Research
COIN: An Outperformer
Shares of Coinbase have rallied 43.8% year to date compared with the industry’s growth of 0.4%, the sector’s rise of 10.8% and the Zacks S&P 500 composite’s gain of 12.2%.
Image Source: Zacks Investment Research
Shares of Robinhood Markets (HOOD - Free Report) and Interactive Brokers Group, Inc. (IBKR - Free Report) , both crypto-oriented companies, have gained 272.9% and 56.2% year to date, respectively.
Robinhood has evolved from a brokerage firm mainly trading in digital assets to a more mature and diversified entity, striving to widen its market and reach. Robinhood continues to diversify its product base to acquire new clients and gain market share.
Interactive Brokers is known for its advanced electronic trading platforms and global market access. The company leverages proprietary systems to automate nearly every aspect of the brokerage process — from trade execution and risk management to compliance and customer onboarding —enabling it to operate with minimal human intervention and significantly lower costs than traditional brokers.
Should you consider adding COIN to your portfolio only based on positive price movements? Let’s delve deeper and find out the factors that can help investors decide whether it is a good time to add COIN stock to their portfolios.
The Case For COIN Stock
CEO Brian Armstrong envisions Coinbase to be the “everything exchange”; thus, this crypto exchange has been constantly working toward achieving the same. It has been building a compelling portfolio consisting of varied crypto assets. Recently, it listed Linea (LINEA), Noice (NOICE) and Syndicate (SYND), all focused on two major blockchains, and has launched two crypto assets - Centrifuge (CFG) and TROLL (TROLL). Earlier, it listed two new non-dollar stablecoins- AUDD (Australia) and XSGD (Singapore). All these endeavors mark COIN’s effort to bring stablecoins mainstream.
COIN applied for a national trust company charter from the U.S. Office of the Comptroller of the Currency. If approved, COIN can offer custody and related banking services across the nation. COIN can also pursue payments and related services, which will propel increasing institutional adoption. COIN has also launched a unique equity index future, giving exposure to Mag 7 stocks as well as to crypto ETFs, iShares Bitcoin Trust and iShares Ethereum Trust.
COIN stands to gain from increased volatility and rising prices in the crypto asset market. The accelerating adoption of stablecoins is poised to further boost revenues. Coinbase stands to gain from strengthened banking relationships, new licenses and the introduction of customized products for diverse customer segments. With a clear growth strategy, the company is increasing its market share in both the U.S. spot and derivatives markets, broadening its product suite and expanding its presence globally.
While the Derbit acquisition establishes Coinbase as a global force in futures, options and perpetuals, deals like Liquifi and One River Digital broaden COIN's tokenization and institutional services.
COIN added DEX trading to its app for U.S. users, except New York State. This expands access from 300 tokens to potentially millions of assets instantly. The DEX integration supports COIN’s goal of a unified and centralized DeFi platform.
A strong liquidity position enables continued strategic investments aimed at enhancing offerings and driving sustainable growth.
Coinbase is a fundamentally strong company with solid liquidity and decreasing debt over the past several quarters. Its total debt capital ratio has been improving. However, Coinbase recently priced $2.6 billion convertible notes, which increases concerns about dilution and financial leverage.
COIN’s Return on Capital
COIN’s return on equity (ROE) in the trailing 12 months was 16%, lower than the industry average of 16.1%.
The return on invested capital in the trailing 12 months was 10.2%, which compared favorably with the industry average of 5.1%. This reflects the insurer’s efficiency in utilizing funds to generate income.
Muted Analyst Sentiment for COIN
The Zacks Consensus Estimate for 2025 and 2026 earnings has moved one cent south each in the past 30 days.
Image Source: Zacks Investment Research
Though the Zacks Consensus Estimate for 2025 and 2026 revenues implies a 7.6% and 9.6% year-over-year increase, respectively, the same for 2025 and 2026 earnings suggests a 0.7% increase but a 22.6% year-over-year decrease, respectively.
How to Play COIN Stock
Coinbase’s efforts to accelerate growth in the crypto market, increase market share in spot trading on consumer and institutional trading platforms and improve trading experience, along with continued innovation, should help it accelerate growth.
However, crypto asset price risk and lower volatility could adversely impact Coinbase’s operating results. A decline in the market price of Ethereum, Bitcoin and other crypto assets could hurt earnings, the carrying value of crypto assets and future cash flows. This may also affect liquidity and the company’s ability to meet ongoing obligations.
Given a premium valuation, projected declines in earnings, muted analyst sentiment and a VGM Score of F, we stay cautious on this Zacks Rank #3 (Hold) stock presently.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.