Is Coinbase Global Stock Still Worth Buying Post Q4 Earnings?

Coinbase Global Inc. COIN reported solid fourth-quarter 2024 results, wherein both the top and bottom lines increased year over year. Both transaction revenues and subscription and services revenues increased year over year. Adjusted EBITDA was $1.3 billion in the reported quarter, which skyrocketed nearly four-fold year over year.COIN provides financial infrastructure and technology for the crypto economy in the United States and internationally and is America's largest registered crypto exchange. It has a market capitalization of $69.6 billion. The average volume of shares traded in the last three months was 10.4 million.A Sneak Peek Into COIN’s Q4 ResultsOperating earnings per share of $3.39 beat the Zacks Consensus Estimate by 74.7%. The bottom line surged more than three-fold year over year. COIN reported net income of $4.68 per share.Total revenues of $2.3 billion beat the Zacks Consensus Estimate by 21.3%. The top line more than doubled year over year on higher transaction revenues, subscription and services revenues and other revenues.Total trading volume more than doubled year over year to $439 million in the reported quarter. The Zacks Consensus Estimate was pegged at $391 million.Total operating expenses increased 47.6% to $1.2 billion in the quarter due to higher transaction expense, technology and development, sales and marketing and general and administrative expenses.Net cash provided by operating activities was $2.5 billion in 2024, which more than doubled year over year.Investment Thesis on COINCoinbase is set to benefit from higher crypto asset volatility and crypto asset prices. Focus on regulatory clarity further benefits Coinbase and the broader crypto economy. The company could win smart contracts because of Ethereum, the second-largest cryptocurrency.The company is set to generate improved revenues, banking on USDC, staking and Coinbase One. Improved payment rails and localization should drive international revenues going forward.Coinbase stays focused on growth by increasing its market share in the U.S. spot and derivatives markets and expanding its product portfolio and international market. Sufficient liquidity supports strategic investment in growth initiatives and expands its service offerings.COIN is set to expand its total addressable market. Brian Armstrong, its co-founder and CEO, stated, “Up to 10% of global GDP could be running on crypto rails by the end of this decade and Coinbase is going to be the preferred partner to come in and build this for many of the companies out there because we have the most trusted and scalable infrastructure with the longest track record.”COIN has prioritized crypto utility and envisions bringing 1 billion or more people on the crypto rail. Thus, it is heavily investing in infrastructure and foundational platforms like Layer 2s, Base and Stablecoins. COIN partnered with Stripe to enhance the global adoption of crypto. Optimistic Analyst Sentiment on COINTwo analysts raised 2025 estimates, while one raised the same for 2026 in the past seven days. The Zacks Consensus Estimate for 2025 has moved 23.6% higher, while the same for 2026 has moved 52.9% north in the same time frame.Image Source: Zacks Investment ResearchCOIN’s Growth StoryThe Zacks Consensus Estimate for COIN’s 2025 earnings is pegged at $4.56 per share, indicating a 40% decrease from the year-ago reported figure on 4.1% lower revenues of $6.3 billion. The consensus estimate for 2026 earnings is pegged at $5.20 per share, indicating a 14% year-over-year increase on 10.1% higher revenues of $6.9 billion.Coinbase’s YTD PerformanceShares of Coinbase have gained 10.4% year to date, outperforming the industry’s increase of 5.2%, the sector’s increase of 5.8% and the Zacks S&P 500 composite’s rise of 3.8% in the same time frame. COIN vs Industry, Sector & S&P 500 in 6 MonthsImage Source: Zacks Investment ResearchCOIN Trading Below 50-Day SMACOIN has been trading below its 50-day simple moving average (SMA), signaling a short-term bearish trend.  The 50-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as it is the first marker of an uptrend or downtrend.Image Source: Zacks Investment ResearchAverage Target Price for COIN Suggests a Solid UpsideBased on short-term price targets offered by 20 analysts, the Zacks average price target is $299.80 per share. The average suggests a potential 9.3% upside from Friday’s closing price.Image Source: Zacks Investment ResearchCOIN’s Favorable Return on EquityCOIN’s return on equity in the trailing 12 months was 20.64%, higher than the industry average of 18.9%, reflecting efficiency in utilizing shareholders’ funds.Image Source: Zacks Investment ResearchThe return on invested capital in the trailing 12 months was 10.6%, which compared favorably with the industry average of 4.5%. This reflects the insurer’s efficiency in utilizing funds to generate income.Image Source: Zacks Investment ResearchExpensive ValuationCoinbase shares are trading at a premium to the industry. Its 12-month forward price-to-earnings of 59.05X is much higher than the industry average of 16.66X.Its Value Score of F indicates a stretched valuation at this moment.Image Source: Zacks Investment ResearchShares of Robinhood Markets HOOD and Interactive Brokers Group, Inc. IBKR, two other crypto-oriented stocks, are also trading at multiples higher than the industry average.Parting Thoughts on COIN StockThe inherent volatility in crypto prices exposes COIN to operational risks. The failure of its foundational platforms also poses risks. Coinbase, the custodian of client assets, is also exposed to cyber threats.Nonetheless, Coinbase’s efforts to accelerate growth in the crypto market, increase market share in spot trading on consumer and institutional trading platforms and improve the trading experience, along with continued innovation, should help it accelerate growth. Its aim is to make USDC the leading dollar stablecoin, solidify Base as the number one chain and lower transaction fees on Base should add to the upside.Despite its premium valuation, one can add this Zacks Rank #1 (Strong Buy) stock for better returns.You can see the complete list of today’s Zacks #1 Rank stocks here.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Interactive Brokers Group, Inc. (IBKR): Free Stock Analysis Report Coinbase Global, Inc. (COIN): Free Stock Analysis Report Robinhood Markets, Inc. (HOOD): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks