Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Coinbase Stock: Is there Room for More Growth?

Stock MarketsSep 14, 2021 02:30PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Coinbase Stock: Is there Room for More Growth?

Coinbase (NASDAQ:COIN) has become a popular option for many crypto investors. This crypto exchange has managed to become a top choice for those seeking publicly traded exposure to the crypto sector today.

However, since Coinbase's IPO, some significant volatility has ensued. The company's IPO price of $250 per share was quickly eviscerated by investor interest. On the first day of trading, COIN stock surged to $429.54 at its peak, before closing the day at $328.28.

However, since then, shares of COIN stock have steadily declined. Today, investors can pick up shares of Coinbase for roughly the company's IPO price. (See COIN stock charts on TipRanks)

For the largest cryptocurrency exchange in the U.S., perhaps there's some real value to be had with COIN stock right now. After all, cryptocurrency volumes are surging, alongside interest in this sector. More than 50 cryptocurrencies are available to be traded on Coinbase, covering most of the popular and highly traded tokens.

There's certainly reason to believe Coinbase's transaction fee-driven business model is poised for long-term success. Surging crypto prices are bullish for interest in this sector, which could drive valuation increases over time. Right now, I remain on neutral with respect to Coinbase.

COIN's Huge Earnings Potential

Ahead of its debut, COIN presented its Q1 estimates on April 6. The company also issued an outlook for Fiscal Year 2021.

In May, the company issued Q1 earnings that slightly missed Wall Street estimates. It showed total revenue of $1.8 billion, with earnings per share of $3.05. However, Wall Street expected the company to earn $1.81 billion, with EPS of $3.07.

Still, COIN earnings soared 2,350%, and sales reached 845% compared to the previous fiscal year.

This past quarter, Coinbase's earnings accelerated higher. The company showed earnings of $6.42 per share on sales of $2.2 billion. However, Coinbase projected slightly lower transaction volumes for Q3, leading to more selling pressure for this hyper-growth stock.

Given these mixed bags of results, investors may not know where to stand on COIN stock. Here are a few other factors to consider.

Rebound in Hash Rate Signals Continued Growth?

A few months ago, the entire crypto industry was in flux over a high-profile crackdown on cryptocurrency miners by the Chinese government.

Given China's importance to global cryptocurrency mining operations (around two-thirds of the world's Bitcoin mining capacity comes out of China), this was a big deal. The global hash rate got cut in half following this announcement, in just two-and-a-half weeks. Hash rate measures the computing power used in crypto mining processes.

Accordingly, this sharp volatility renewed concerns about China's importance to stabilizing crypto prices. Concerns from prominent Bitcoin players that the crackdown could intensify drove Bitcoin prices, and by extension, those of crypto exchanges such as Coinbase, lower.

However, a recovery in the global hash rate has sparked renewed fervor in the cryptocurrency space. Investors seem to feel more confident than ever that the growth cryptocurrencies have seen thus far can be continued.

That said, many remain on the fence during this volatile time.

Wall Street's Take on COIN Stock

As per TipRanks' analysts rating consensus, COIN stock is a Moderate buy. Out of 15 ratings, there are 11 Buy recommendations, three Hold recommendations, and one Sell recommendation.

The average COIN price target is $350.17. The average price target lies between a high of $500 per share, and a low of $220 per share.

Bottom Line

Coinbase has done an impressive job of allowing new cryptocurrencies to trade on its platform. An improved outlook stemming from stabilization in the crypto mining sector, and continued interest in cryptocurrencies, makes Coinbase an intriguing stock right now.

However, COIN stock has underperformed of late. There are concerns about this cryptocurrency exchange's cash balance, as well as its long-term outlook, should a bear market take hold in crypto.

Right now, everything's moving along fine. But the winds can change quickly. Investors should be prepared for anything with COIN stock.

Disclosure: At the time of publication, Chris MacDonald did not have a position in any of the securities mentioned in this article

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

Coinbase Stock: Is there Room for More Growth?
 

Related Articles

Tech slide, China woes weigh on European stocks
Tech slide, China woes weigh on European stocks By Reuters - Sep 28, 2021

(Reuters) - European stocks fell on Tuesday, as a surge in government bond yields pressured high-growth technology shares, with fresh signs of a slowdown in China's economy...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email