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COIN

Coinbase Global NasdaqGS:COIN Stock Report

Last Price

US$84.00

Market Cap

US$18.9b

7D

-5.5%

1Y

-67.3%

Updated

11 Aug, 2022

Data

Company Financials +
COIN fundamental analysis
Snowflake Score
Valuation1/6
Future Growth1/6
Past Performance0/6
Financial Health4/6
Dividends0/6

COIN Stock Overview

Coinbase Global, Inc. provides financial infrastructure and technology for the cryptoeconomy in the United States and internationally.

Coinbase Global, Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Coinbase Global
Historical stock prices
Current Share PriceUS$84.00
52 Week HighUS$368.90
52 Week LowUS$40.83
Beta0
1 Month Change54.87%
3 Month Change23.77%
1 Year Change-67.25%
3 Year Changen/a
5 Year Changen/a
Change since IPO-74.41%

Recent News & Updates

Aug 09

Coinbase Has Rallied 90% And The BlackRock Partnership Couldn't Have Come At A Better Time

Coinbase has rallied 92.77% over the past month but is still down -63.58% YTD and shares are still off their 1-year highs by -74.78%. Coinbase generates the majority of its revenue from transaction fees and 76.05% of its transaction volume comes from institutions. The BlackRock partnership through Aladdin could drive a substantial amount of transactions through Coinbase's platform leading to growing revenue. Coinbase still has a lot of problems to work through such as their operational expenses and many variables that are unpredictable such as the SEC. Investors should do a lot of research because investing in Coinbase comes with variables that other companies do not face. The fall from grace has been dramatic for shares of Coinbase (COIN). Over the past year shares topped out around $368.90 and witnessed an -88.18% decline as shares fell -$328.02 to $40.88 in June. Over the past month, shares of COIN have rallied just 92.77% but are still down -63.58% YTD and are still off their highs by roughly 75%. Shares of COIN recently spiked as news broke about its partnership with BlackRock (BLK), allowing its institutional users to trade Bitcoin (BTC-USD). The BLK partnership announcement couldn't have come at a better time as COIN has been associated with negative headlines such as layoffs and declining numbers. Its Q1 2022 earnings report was difficult as COIN missed on the top and bottom line, and the estimates for Q2 are not pretty. I am going to revisit a company I was bullish on to see if my perspective has changed going into Q2 earnings on 8/9/22. Seeking Alpha There are aspects with the numbers that are certainly a cause for concern. The story has certainly changed for COIN in 2022. At the close of Q2 2021, COIN was crushing the numbers. In Q2 2021, COIN produced EPS of $6.42, which was a beat of $3.84, and generated $2.23 billion in revenue, an increase of 1,098.0% YoY. Verified users grew 21.43% QoQ, revenue increased 27.30% QoQ, and net income grew 108.22% QoQ. COIN seemed like an unstoppable force as the numbers were outright impressive. Steven Fiorillo, Seeking Alpha Fast forward to the end of Q1 2022, and COIN has been a different story. Its userbase increased YoY by 75% (42 million), and its monthly users making transactions increased by 50.82% (3.1 million) YoY. COIN generates the majority of its revenue from trading activity, and that's why the YoY numbers were perplexing. YoY the membership grew 75%, and monthly users making transactions increased 50.82% YoY, but the quarterly trading volume declined by -7.76% (-26 billion). This made COIN's revenue decline by -$634.68 million (-35.24%) and its net income took a -$1.2 billion swing pushing its quarterly loss to -$430 million. Q1 2021 Q1 2022 Difference Verified Users 56,000,000.00 98,000,000.00 42,000,000.00 75.00% Monthly Transacting Users 6,100,000.00 9,200,000.00 3,100,000.00 50.82% Trading Volume $335,000,000,000.00 $309,000,000,000.00 -$26,000,000,000.00 -7.76% Revenue $1,801,112,000.00 $1,166,436,000.00 -$634,676,000.00 -35.24% Net Income $771,463,000.00 -$430,000,000.00 -$1,201,463,000.00 -155.74% If revenue declined by -636.11 million YoY, how did net income decline by -$1.2 billion? From Q1 2021 thru Q1 2022, COIN's quarterly total operating expenses increased by 111.57% ($907.5 million), and their revenue declined by -35.24% (-$634.68 million). Look at the two largest line items, technology and development and general and administrative. Given the nature of COIN's business, it makes sense that continuous capital will be deployed to technology and development, so an increase of 209.76% to spur innovation isn't something that would alarm me. After reading this article by the Wall Street Journal ((WSJ)) the general and administrative line caused concern from an operational perspective. General and administrative grew by 241.15% YoY. The WSJ cited that COIN's headcount reached 6,000 this summer while FTX had 300 employees. In June of 2022, COIN laid off 1,100 employees, roughly 18% of its workforce. If I speculate that general and administrative is 100% employee salaries, reducing its headcount by 18% would save $74.44 million per quarter in expenses bringing this line item to $339.13 million. If I reduce this line item to reflect my assumption, COIN's total operating expenses would have been $1.65 billion in Q1 2021 if the workforce reduction occurred at the end of 2021. Their operating loss would have still been in the red by -$480.02 million. I don't work at COIN, and I have no idea what the operational ramifications of an 18% workforce reduction will be to their output. Math is math, though, and based on the numbers, this workforce reduction would not have generated positive operating income in Q1. Q1 2021 Q1 2022 Difference Transaction expense $234,066,000.00 $277,826,000.00 $43,760,000.00 18.70% Technology and development $184,225,000.00 $570,664,000.00 $386,439,000.00 209.76% Sales and marketing $117,990,000.00 $200,204,000.00 $82,214,000.00 69.68% General and administrative $121,231,000.00 $413,578,000.00 $292,347,000.00 241.15% Other operating expense, net $155,887,000.00 $258,627,000.00 $102,740,000.00 65.91% Total operating expenses $813,399,000.00 $1,720,899,000.00 $907,500,000.00 111.57% Revenue $1,801,112,000.00 $1,166,436,000.00 -$634,676,000.00 -35.24% Operating (loss) income $987,713,000.00 -$554,463,000.00 Outside of the operational expenses, I am concerned about the declining trajectory of its business. Members and member activity is up, but revenue and net income are declining. The consensus estimates now have 3 additional quarters of negative EPS baked into COIN's outlook, and the current quarter has been revised 8 times. The street is calling for revenue to come in at $876.09 million in Q2 and -$2.77 of GAAP EPS. This is a bit hard to swallow because if I plug in $876.09 million of revenue with all Q1's expenses and change the general and administrative number to reflect an -18% reduction, COIN would stand to have an operating loss of -$770.37 million in Q2. Seeking Alpha Everything lives and dies with trading volume for COIN. In Q1, retail accounted for 23.95% of COINs trading volume while institutional accounted for 76.05%. BTC-USD and Ethereum (ETH-USD) accounted for 45% of COIN's trading volume on a cryptocurrency level. Going back to an article I wrote on 8/13/21, which has not aged well as COIN just fell apart, I had put the trading volumes of the top 60 coins by market cap. BTC's trading volume over the current 24-hour period was $33.3 billion, and ETH's was $27.2 billion. BTC was at $45,760, and ETH traded at $3,170. Right now, BTC has a $29 billion 24-hour trading volume, and ETH is at $18.9 billion. BTC is trading at a -$4 billion daily volume (-12.12%), and ETH is trading at a -$8.3 billion (-30.51%) daily trading volume from roughly the same time last year. This doesn't get me excited that COIN will surprise on the consensus estimates since their numbers live and die with trading volume. Coinbase Coinbase While the numbers are trending in the wrong direction, the latest news could be very promising

Jul 26

Coinbase under SEC investigation for cryptocurrency listings

A U.S. probe is looking into Coinbase Global (NASDAQ:COIN) if it improperly let Americans trade digital assets that should have been registered as securities. U.S. SEC scrutiny of Coinbase has increased since the platform expanded the number of tokens in which it offers trading. The agency probes into an alleged insider trading scheme that led the regulator last week to sue a former Coinbase manager and two other people. A former employee violated its insider-trading rules by leaking information to help his brother and a friend buy tokens just before they were listed on the platform. With crypto seeing significant drop in its market prices, U.S. regulators are are now overseeing the digital currencies more closely as it believes that trading platforms should do more to protect retail investors. Coinbase lets Americans trade more than 150 tokens making it the largest U.S. trading platform. The company posted an entry on its blog that "Coinbase does not list securities. End of story." SEC Chair Gensler has long argued that many cryptocurrencies fall under the regulator’s jurisdiction and that firms offering them should register with his agency. COIN shares are down 3.9% down premarket.

Jul 15

Coinbase investigating issue of delayed EOS withdrawals

Coinbase Global (NASDAQ:COIN) said Friday it's investigating an issue involving delayed EOS (EOS-USD) withdrawals, first reported at 4:58 AM Pacific Time (7:58 AM ET). The matter doesn't seem to be affecting the crypto exchange's stock price, which is rising 1.2% in Friday premarket trading. On Thursday, Coinbase (COIN) stock dropped as Mizuho analyst Dan Dolev trimmed his full-year estimates as the company continues to lose market share.

Jul 01

Is Coinbase Stock A Buy As Cryptocurrency Price Drops?

Coinbase is not only facing macroeconomic challenges, but also the threat of competition. To evaluate the possibility of a reversal in Coinbase stock, an investor needs to understand the reasons behind the recent decline in stock price. Coinbase may have to take bold decisions to come out of this challenging period, but that is not a bad thing for investors focused on the long term. Crypto prices continue to plummet, wiping all the gains in recent history. Because Bitcoin was the best performing asset class in 2020, coming into 2022, many investors assumed crypto prices will hold ground despite the challenges facing the global economy. As we now know, these investors have already been proven wrong. I could never make up my mind to invest in cryptos and other digital assets although I always believed - and still do - that cryptocurrencies will have a bright future in the long run although these digital assets might not survive in this shape and form. This is why I always thought it made more sense to invest in Coinbase Global, Inc. (COIN) to get indirect exposure to the crypto industry without having to bear token-specific risk. COIN stock got off to a good start after debuting on Nasdaq and this did not help me at the time, but with stock prices down substantially YTD, the time seems right for me to consider investing in Coinbase stock once again. Why Has Coinbase Stock Been Dropping? Coinbase stock is down 80% this year, mirroring the price of Bitcoin which is down 58% in 2022. Many analysts believe the situation will only get worse from here. The sell-off is being driven by a few factors. First, this year, investors have been reducing their exposure to growth stocks and other high-risk bets as the U.S. Federal Reserve takes aggressive action to curb inflation. Bitcoin might have been thought of as “digital gold” or a “hedge” against inflation, but investors are currently treating cryptocurrencies as high-risk stocks that are not yet profitable. With the Fed raising rates faster than expected to combat rising inflation, investors are avoiding risky assets such as cryptocurrency. Prices of digital assets and the volume of transactions made on Coinbase's platform have a significant impact on the company's overall revenue. This means that if cryptocurrency prices and trading volume continue to fall, Coinbase will naturally see a loss in revenue, which in turn will spook investors. This is exactly what is happening today. The company's quarterly results have already reflected this downturn. In the most recent quarter, Q1 2022, the company reported weaker than anticipated financial results, with net revenue declining 27% from a year ago. Additionally, retail monthly transacting customers fell almost 20% QoQ to 9.2 million, and overall trade volume fell dramatically from $547 billion in Q4 2021 to $309 billion in Q1 2022. Exhibit 1: Key business metrics Q1 shareholder letter Many analysts are downgrading the stock, which could be an indication that things could get considerably worse when the company reports results for the second quarter. Recently, Coinbase's rating was lowered by Goldman Sachs (GS) analysts from neutral to sell. As the crypto winter continues to have a negative impact on crypto exchanges including Coinbase, analyst Will Nance downgraded COIN shares, lowering the price target to $45 from $70 earlier this year. The analyst predicts the ongoing panic selling will result in further deterioration of Coinbase's revenue, leading to a decline of 73% in the second half of this year and 61% in 2022. J.P. Morgan (JPM) also downgraded Coinbase from overweight to neutral earlier this month, and Finance brokerage Redburn Partners downgraded Coinbase from buy to neutral. These negative analyst actions have cast doubt over Coinbase’s future and created uncertainty among investors. Exhibit 2: Coinbase stock price vs. average analyst target price Bloomberg The company's bonds have also been under pressure with its senior unsecured bonds maturing in 2031 among the worst performers in the U.S. high-yield market. Moody’s Corporation (MCO) lowered Coinbase's guaranteed senior unsecured notes from Ba1 to Ba2 and its corporate family rating from Ba2 to Ba3. These grades denote "junk" status. Coinbase announced a significant restructuring earlier this month in response to inactivity in crypto trading and rising inflation. The company announced that it would lay off 1,100 employees, or roughly 18% of its workforce, to deal with rising operating expenses, which reached a record $1.7 billion in the first quarter. The company stated that it over-hired during the cryptocurrency boom and there’s reason to believe that this is just the beginning and that there would be more layoffs to bring Coinbase's costs in line with decreased sales. Another reason behind the decline in Coinbase stock is rival crypto exchange Binance announcing a reduction in certain trading fees for customers. Binance announced that users will be able to make spot Bitcoin trades for U.S. dollars and stablecoins tether, USD Coin, and Binance USD without paying spot trading fees. Binance is the world's largest crypto exchange by trading volume and its recent move amid a prolonged bearish period for cryptocurrencies poses a significant threat to Coinbase. All the reasons discussed in this segment of the analysis played a role in the massive decline in Coinbase's market value this year. What Is Coinbase's Long-Term Outlook? Bitcoin is regarded as one of the most cutting-edge technologies in the investment world today. Bitcoin's strong recovery from significant sell-offs in the past has made it the world's most valuable cryptocurrency, prompting leading analysts to label it as an inflation hedge. Although Bitcoin has so far not been effective as an inflation hedge, its long-term track record and the cult-like follower base suggest investors should not rule out the possibility of a stellar recovery from Bitcoin even in the short run. According to Coinbase, there are multi-year cycles that affect Bitcoin prices that span between two and four years. And, given the likelihood that investors will prefer cash-flow-yielding assets over cryptocurrencies amid rising interest rates, the going could be tough for the company in the short term. Coinbase will need to significantly reduce its cost base as retail trading activity declines to put breaks on the cash burn. To lure more customers, Coinbase has decided to combine Coinbase and Coinbase Pro onto a single platform, which may help users switch easily and take advantage of lower pricing. This is a good start but we believe Coinbase will have to scale back more, give up short-term profits, and position the company as a more efficient business to be prepared for the lucrative long-term growth opportunity available for the company. Coinbase initially relied heavily on trading volumes and fees to generate revenue. As zero-fee trading grabs users' attention, Coinbase has begun to diversify its revenue streams. The zero-fee trading concept was pioneered by Robinhood Markets, Inc. (HOOD) which made inroads into the retail investing world a few years ago. This resulted in major stock brokerages switching to commission-free online trading. Recently, many other cryptocurrency exchanges, including FTX US, have announced plans to implement zero-commission trading. Furthermore, Binance US has also announced to lower certain trading fees. With this shift, Coinbase is currently testing Coinbase One, a subscription service for customers that would provide them with zero-fee trading for up to $10,000 in transactions per month. In the world of cryptocurrencies, Coinbase is an industry leader. The business has established a strong reputation for security, compliance, and transparency, which are likely to make Coinbase one of the preferred platforms to trade and invest on as Bitcoin and other cryptocurrencies recover. The company aims to make cryptocurrency a new financial system. The market may appear to indicate that investors are losing interest in digital assets, yet institutional adoption of cryptocurrencies has recently increased significantly. Furthermore, the company has made substantial investments to establish itself in the new digital asset and NFT markets. In Q1, Coinbase added many new assets and payment rails. Although these investments and the market downturn caused Coinbase to post a loss in Q1, the company was highly profitable in 2021, when cryptocurrencies surged, with a net income of approximately $3.6 billion. The possibility of extraordinary profits during good times suggests that the company's prospects should improve gradually as the crypto cycle enters another growth phase. Coinbase's long-term outlook remains promising but the company might have to go through a lot of pain in the short run to get to a stage where it will be able to capitalize on the expected adoption of crypto and digital assets. Is COIN Stock A Good Choice As Cryptocurrency Prices Drop? Coinbase generates a majority of net revenue from transactions in Bitcoin and Ethereum. In 2022, the value of the global cryptocurrency market has fallen by around $1 trillion, and Bitcoin and Ethereum are now trading well below their previous highs. Investors’ concerns about persistent inflation have played a big role in the equity and cryptocurrency market downturn. More interest rate hikes would make the markets more volatile and uncertain in the coming months. If the demand for these digital assets keeps falling, Coinbase will significantly suffer. Exhibit 3: Crypto asset volatility and Coinbase trading volume Q1 shareholder letter Going by the uncertainty expressed by analysts, the company CEO, and investors, we believe investors looking for short-term opportunities should steer clear of COIN stock for the time being. CEO Brian Armstrong warned investors that things could get significantly worse before they get better. Although the dip may appear to be a good time to buy the stock for trading purposes, blindly betting on Coinbase stock could lead to substantial losses given that it is challenging to predict when the cryptocurrency market will recover.

Shareholder Returns

COINUS Capital MarketsUS Market
7D-5.5%2.8%1.3%
1Y-67.3%-15.4%-11.7%

Return vs Industry: COIN underperformed the US Capital Markets industry which returned -16% over the past year.

Return vs Market: COIN underperformed the US Market which returned -11.6% over the past year.

Price Volatility

Is COIN's price volatile compared to industry and market?
COIN volatility
COIN Average Weekly Movement19.5%
Capital Markets Industry Average Movement0.5%
Market Average Movement7.8%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market3.2%

Stable Share Price: COIN is more volatile than 90% of US stocks over the past 3 months, typically moving +/- 20% a week.

Volatility Over Time: COIN's weekly volatility has increased from 14% to 20% over the past year.

About the Company

FoundedEmployeesCEOWebsite
20123,730Brian Armstronghttps://www.coinbase.com

Coinbase Global, Inc. provides financial infrastructure and technology for the cryptoeconomy in the United States and internationally. The company offers the primary financial account in the cryptoeconomy for retailers; a marketplace with a pool of liquidity for transacting in crypto assets for institutions; and technology and services that enable ecosystem partners to build crypto-based applications and securely accept crypto assets as payment. Coinbase Global, Inc. was founded in 2012 and is based in Wilmington, Delaware.

Coinbase Global, Inc. Fundamentals Summary

How do Coinbase Global's earnings and revenue compare to its market cap?
COIN fundamental statistics
Market CapUS$18.91b
Earnings (TTM)-US$104.26m
Revenue (TTM)US$5.78b

3.3x

P/S Ratio

-181.4x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
COIN income statement (TTM)
RevenueUS$5.78b
Cost of RevenueUS$0
Gross ProfitUS$5.78b
Other ExpensesUS$5.88b
Earnings-US$104.26m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-0.46
Gross Margin100.00%
Net Profit Margin-1.80%
Debt/Equity Ratio60.7%

How did COIN perform over the long term?

See historical performance and comparison