Wall Street's Outlook on Coinbase Shares: Bullish or Bearish?
Coinbase Global's Performance Exceeds S&P 500, Yet Lags Crypto-Focused ETF
Coinbase Global, Inc. (COIN), a prominent cryptocurrency exchange platform valued at $66.8 billion, surpasses the broader market in the past 52 weeks. The New York-based company, which facilitates the buying, selling, and storing of digital assets like Bitcoin and Ethereum, has seen shares rally by 12.1%, compared to the S&P 500 Index's 11.6% growth during the same period.
Over the same duration, COIN has underperformed the Fidelity Crypto Industry and Digital Payments ETF (FDIG), which has experienced a 17.8% uptick. However, COIN outperformed FDIG's 3.8% drop year-to-date (YTD). On May 13th, COIN observed its largest single-day gain since Trump's election victory, as the company was announced to be added to the S&P 500 Index, replacing Discover Financial Services (DFS).
On May 8th, COIN declared its Q1 results, resulting in a 3.5% drop in shares in the subsequent trading session. Despite an improved total revenue of $2 billion, up 24.2% from the previous year-ago quarter, mainly due to higher transaction revenues and subscription fees, the figures fell short of consensus estimates. However, its adjusted net income per share declined by 23.3% year-over-year to $1.94 but managed to surpass forecasted figures. Increased operating expenses contributed to a decline in the bottom line.
Analysts anticipate a 35.3% year-over-year drop in COIN's earnings per share (EPS) for the current fiscal year ending in December, to $4.92. Despite mixed ratings, the average price target points to potential upside. However, the stock's EPS is subject to considerable market and regulatory uncertainties.
As of the latest data, among 26 analysts covering the stock, the consensus rating is a "Moderate Buy," consisting of 10 "Strong Buy," one "Moderate Buy," 14 "Hold," and one "Strong Sell" rating. Jefferies Financial Group Inc. (JEF) recently maintained a "Hold" rating on COIN while raising its price target to $260. The Street-high price target of $400 suggests an ambitious upside potential of 50.2%.
Coinbase's stock, driven by its high sensitivity to crypto market trends, exhibits more volatility than the broader market index, such as the S&P 500. Both Coinbase and FDIG are impacted by crypto market dynamics, but Coinbase's performance is more directly determined by its operational efficiency and market position as a leading cryptocurrency exchange.
Finance-related analysts anticipate that Coinbase's stock, due to its high sensitivity to cryptocurrency market trends, may continue to exhibit more volatility compared to the S&P 500. In the realm of investing, understanding the company's operational efficiency and market position as a leading cryptocurrency exchange, such as Coinbase, can play a crucial role in making informed decisions in the stock-market.
