Copyright Forbes
Over the past week, Coinbase Global (COIN) stock has declined by 10%, and it is presently priced at $309.14. Overall, we think there is not much to worry about in COIN stock, considering its overall Strong operational results and financial health. That said, due to its Very High valuation, the stock seems Relatively Expensive. Coinbase stock trades at over 11x trailing revenue, compared to about 3x for the broader S&P. Moreover, Coinbase is highly sensitive to cryptocurrency market cycles, with trading volumes and sentiment tracking the boom-and-bust nature of the crypto markets. Individual stocks can be volatile and may cause anxiety, but strategic allocation and diversification enable you to remain invested. Our Boston-based wealth management partner’s asset allocation strategy is specifically designed for this purpose. Let’s dive into the details of each of the evaluated factors, but first, for quick context: With a $79 Bil market capitalization, Coinbase Global offers financial infrastructure and technology for the cryptoeconomy, providing primary crypto financial accounts to retail clients both in the U.S. and internationally. [1] Valuation Appears Very High This table illustrates how COIN is valued in comparison to the broader market. For further details, visit: COIN Valuation Ratios MORE FOR YOU [2] Growth is Strong In the last 3 years, Coinbase Global has experienced an average revenue growth rate of 23.3% Its revenues have increased by 49%, rising from $4.7 Bil to $7.0 Bil over the past 12 months Additionally, its quarterly revenues grew by 3.3%, reaching $1.5 Bil in the most recent quarter compared to $1.4 Bil a year earlier. This table showcases how COIN is growing compared to the broader market. For more information, see: COIN Revenue Comparison [3] Profitability Seems Very Strong COIN's operating income for the last 12 months amounted to $1.9 Bil, reflecting an operating margin of 27.0% With a cash flow margin of 25.8%, it generated approximately $1.8 Bil in operating cash flow during this timeframe For the same duration, COIN produced nearly $2.9 Bil in net income, indicating a net margin of roughly 40.8% This table highlights how COIN’s profitability stands against the broader market. For additional details, visit: COIN Operating Income Comparison [4] Financial Stability Appears Very Strong At the conclusion of the latest quarter, COIN's debt was $4.4 Bil, while its current market cap is $79 Bil. This results in a debt-to-equity ratio of 5.6% COIN's cash (including cash equivalents) constitutes $9.5 Bil of $23 Bil in total assets. This provides a cash-to-assets ratio of 40.7% [5] Downturn Resilience Is Very Weak COIN has performed significantly worse than the S&P 500 index during various economic declines. We evaluate this based on (a) the extent of the stock’s decline and (b) the speed of its recovery. 2022 Inflation Shock COIN stock experienced a 90.9% decline from its peak of $357.39 on 9 November 2021 to $32.53 on 28 December 2022, compared to a peak-to-trough decline of 25.4% for the S&P 500. Nonetheless, the stock fully rebounded to its pre-crisis peak by 26 June 2025. Since then, the stock surged to a high of $419.78 on 20 July 2025 and is currently trading at $309.14. However, the risk extends beyond significant market crashes. Stocks often decline even in favorable market conditions - consider events such as earnings reports, business updates, and changes in outlook. Refer to COIN Dip Buyer Analyses to explore how the stock has bounced back from sharp declines in the past. The Trefis High Quality (HQ) Portfolio, featuring a collection of 30 stocks, has consistently outperformed its benchmark that comprises all three – the S&P 500, S&P mid-cap, and Russell 2000 indices. What accounts for this? As a collective, HQ Portfolio stocks generated superior returns with reduced risk compared to the benchmark index; presenting a smoother experience, as demonstrated in HQ Portfolio performance metrics.
