Yahoo Finance Coinbase Global (COIN) Up 394.8% in a Year: Will the Rally Last?
Coinbase Global, Inc.’s COIN shares have skyrocketed 394.8% in a year compared with the industry's growth of 36%. The Finance sector and the Zacks S&P 500 index have gained 20.9% and 23.2% in the said time frame, respectively. With a market capitalization of $61.34 billion, the average volume of shares traded in the last three months was 9.92 million.
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The rally was largely driven by higher average fees, growing average crypto asset prices, investments in technology, improved Crypto trading and expansion of international operations.
Coinbase Global currently sports a Zacks Rank #1 (Strong Buy). It has a solid record of beating earnings estimates in each of the last four quarters, the average being 364.63%.
Will the Bull Run Continue?
The Zacks Consensus Estimate for Coinbase Global’s 2024 earnings per share indicates a year-over-year increase of 1,840.54%. The consensus estimate for revenues is pegged at $5.70 billion, implying a year-over-year improvement of 83.51%.
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 219% and 115.4% north, respectively, in the past 60 days, reflecting analysts’ optimism.
Coinbase Global, by virtue of the nature of its business operations, is poised to grow on heightened volatility.
Crypto trading remains a major revenue driver of COIN. Over the last six years, derivatives trading constitutes the majority of crypto trading volume. Though Coinbase Global is a leader in spot trading in the United States, it launched derivatives trading globally last year. The company’s efforts to adapt to the changing trends is a positive.
Expansion of operations in Bermuda, Brazil, Canada, France, Singapore and Spain is expected to have driven growth. Most of the world's capital is held in institutions. COIN improved its institutional trading products with Coinbase Prime, grew institutional financing products, launched Coinbase Asset Management and also acted as a catalyst in the approval of Bitcoin ETFs in 2023.
Coinbase Global’s top priority remains its two largest revenue streams, trading fees and Stablecoins. Intensifying focus on international expansion, growing derivatives and spot trading and integration of USD Coin into the crypto economy should help it achieve its goal.
Transaction revenues are expected to improve by virtue of higher blended average fees for Consumer and Institutional combined with higher trading volumes.
Subscription and services revenues should continue to gain from higher blockchain rewards, driven by a rise in average crypto asset prices, an increase in interest and finance fee income, improved demand for Prime Financing products and higher average crypto asset prices. Higher Coinbase One revenues driven by an increase in paid subscribers, average crypto assets under custody, asset prices and net native unit inflows should add to the upside. COIN estimates second-quarter subscription and services revenues in the range of $525-$600 million.
Investments in technology to enhance operational efficiency and prudent expense management should lower costs and improve margins.
Other Stocks to Consider
Some other top-ranked stocks from the finance sector are Lemonade, Inc. LMND, EverQuote, Inc. EVER and Radian Group Inc. RDN, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Lemonade has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 12.82%. Shares of LMND have plunged 22.2% in the past year.
The Zacks Consensus Estimate for LMND’s 2024 and 2025 earnings implies year-over-year growth of 13.5% and 18.3%, respectively.
EverQuote’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 65.16%. Shares of EVER have skyrocketed 171.8% in the past year.
The Zacks Consensus Estimate for EverQuote’s 2024 and 2025 earnings per share indicates a year-over-year increase of 102.6% and 362.50%, respectively.
Radian has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 22.79%. Shares of RDN have climbed 17% in the past year.
The Zacks Consensus Estimate for RDN’s 2024 and 2025 revenues implies year-over-year growth of 8.2% and 4.9%, respectively.
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Radian Group Inc. (RDN) : Free Stock Analysis Report
EverQuote, Inc. (EVER) : Free Stock Analysis Report
Lemonade, Inc. (LMND) : Free Stock Analysis Report
Coinbase Global, Inc. (COIN) : Free Stock Analysis Report
