Group 1 - Coinbase Global, Inc. has experienced increased volatility in 2024 due to a tariff-led selloff [1] - The company had a successful year in 2024, driven by significant institutional investment in cryptocurrencies, particularly Bitcoin [1] - The investment strategy of the leader of the Best Of Breed Growth Stocks group focuses on stocks with a high probability of delivering substantial alpha compared to the S&P 500 [1] Group 2 - The leader emphasizes a combination of growth-oriented principles and strict valuation criteria to enhance the margin of safety [1] - The investment group offers exclusive access to high-conviction stock picks, comprehensive research reports, real-time trade alerts, and macro market analysis [1] - The financial analyst seeks undervalued companies with long-term growth potential, focusing on strong balance sheets and management teams [1]

Core Viewpoint - Coinbase Global, Inc. is expected to exceed analyst revenue expectations for Q4-24, with estimates around $2 billion compared to the $1.7 billion forecasted by analysts [1]. Group 1 - The earnings preview for Coinbase indicated a strong performance, with a projected revenue of approximately $2 billion for Q4-24 [1].

Core Insights - Coinbase (COIN) and Robinhood (HOOD) are both significant players in the cryptocurrency space, influenced by regulatory changes and market movements, particularly Bitcoin [1][2] - The performance of these stocks is closely tied to the volatility and prices of crypto assets, with optimism surrounding regulatory clarity and technological integration [1][3] Factors to Consider for COIN - Coinbase, as the largest registered crypto exchange in the U.S., benefits from increased crypto asset volatility and prices, with 83% of its revenues generated domestically [3][5] - Total revenues for Coinbase more than doubled in 2024, marking two consecutive years of positive adjusted EBITDA [3] - Trading volume also more than doubled year over year in 2024, leading to a significant increase in transaction revenues [4] - The company ended 2024 with $9.3 billion in USD resources, an increase of $3.8 billion year over year, while its debt levels have been decreasing [5][6] - Management anticipates Coinbase will be a key platform for companies integrating cryptocurrency, although rising transaction and operating expenses may pressure margins [6] Factors to Consider for HOOD - Robinhood has transitioned from a digital asset brokerage to a more diversified entity, focusing on expanding its market reach and product offerings [8] - The company expects transaction-based revenues to grow due to increased retail participation and improvements in net interest revenues [9] - Cost control measures have led to improved margins, although regulatory scrutiny poses risks to profitability [10] - Significant stock-based compensation (SBC) expenses may dilute shareholder value in the near term [11] Estimates for COIN and HOOD - The Zacks Consensus Estimate for COIN's 2025 revenue indicates a year-over-year increase, while EPS estimates suggest a 3.7% decline [12] - Conversely, HOOD's 2025 revenue and EPS estimates imply increases of 25.4% and 34.9%, respectively, although EPS estimates have recently decreased [12][14] Valuation Metrics - Coinbase is trading at a forward earnings multiple of 23.83X, below its five-year median of 25.02X [14] - Robinhood's forward earnings multiple stands at 27.75X, above its five-year median of negative 10.24X [14] Conclusion - Coinbase's performance is heavily reliant on cryptocurrency market movements, while Robinhood offers a more diversified portfolio including stocks and options [15] - Both companies are expanding their international presence, targeting markets in Europe and Asia Pacific [15] - Over the past year, HOOD shares have increased by 131.3%, while COIN shares have decreased by 26.7% [17]

Core Viewpoint - Coinbase was anticipated to be included in the S&P 500 index during the March 2025 rebalancing due to its high market cap and strong financial performance, but it was ultimately passed over in favor of other companies, marking a recurring disappointment for the firm [1][2]. Group 1: Company Performance - Coinbase has a current market capitalization of $44 billion, exceeding the S&P 500's threshold of $8.2 billion [1]. - The company reported $2.3 billion in revenue for the last quarter of 2024, indicating strong financial performance [1]. Group 2: Stock Volatility and Market Sentiment - Analysts speculate that the volatility of COIN's stock, influenced by fluctuations in the cryptocurrency market, may have contributed to its exclusion from the S&P 500 [2][3]. - As of the latest update, COIN stock had declined approximately 32% year-to-date, with a current valuation of $174.52 [3]. Group 3: Analyst Ratings and Price Targets - Despite setbacks, analysts at TipRanks have a 'Moderate Buy' rating for Coinbase, with 11 analysts recommending a 'Buy' and 9 suggesting a 'Hold' [4][5]. - The average 12-month price target for Coinbase is $330.79, representing an upside of 89.54%, with forecasts ranging from a high of $475 to a low of $195 [5]. Group 4: Recent Analyst Coverage - Goldman Sachs initiated coverage of Coinbase with a 'Neutral' rating and a price target of $195, citing cautious optimism regarding potential growth from rising cryptocurrency prices and possible regulatory reforms [6]. - Bernstein adopted a more bullish outlook, giving Coinbase an 'Outperform' rating with a price target of $310, highlighting the potential benefits from crypto-friendly policies and regulatory clarity [7].

Group 1 - Coinbase Global Inc.'s trading volumes have significantly decelerated, but the potential of its non-trading revenue streams is being underestimated by investors [1][2] - In March, the daily average trading volume decreased by 20% month-on-month and is 30% below January's daily average [2] - If the trading volume trend from March continues into Q2 2025, the estimated trading volume would be $335 billion, which is about 4% below the current estimate of $350 billion [3] Group 2 - Despite the slowdown in trading volumes, Coinbase Global is gaining market share [3] - Stablecoin growth has accelerated, reaching a record high in March, with USDC growing by 36% year-to-date compared to only 5% for Tether [4] - Coinbase Global's 50% ownership of USDC is viewed as an underappreciated positive factor for the company [4] Group 3 - Analyst Chris Brendler from Rosenblatt Securities reiterated a Buy rating for Coinbase Global with a price target of $305 [1] - At the time of publication, shares of Coinbase Global had declined by 2.8% to $198.37 [4]

Company Performance - Coinbase Global, Inc. (COIN) ended the latest trading session at $190.38, reflecting a +0.33% adjustment from the previous day's close, outperforming the S&P 500's daily loss of 0.22% [1] - The stock has experienced a decline of 26.64% over the past month, significantly worse than the Finance sector's loss of 3.33% and the S&P 500's loss of 7.48% [1] Earnings Expectations - The upcoming earnings report for Coinbase is anticipated to show an EPS of $2.18, representing a 32.12% increase from the same quarter last year, with revenue expected to reach $2.2 billion, up 34.25% year-over-year [2] - For the full year, earnings are projected at $7.32 per share and revenue at $7.79 billion, indicating a -3.68% change in earnings and a +18.7% change in revenue compared to the previous year [3] Analyst Estimates and Rankings - Recent changes in analyst estimates for Coinbase suggest a positive outlook for the company's business, with a 1.38% increase in the consensus EPS projection over the past 30 days [5] - Coinbase currently holds a Zacks Rank of 1 (Strong Buy), which has historically outperformed with an average annual return of +25% since 1988 [5] Valuation Metrics - Coinbase is trading at a Forward P/E ratio of 25.92, which is a premium compared to the industry average Forward P/E of 9.48 [6] - The company's PEG ratio stands at 9.67, while the Financial - Miscellaneous Services industry has an average PEG ratio of 1.02 [6] Industry Context - The Financial - Miscellaneous Services industry, part of the Finance sector, has a Zacks Industry Rank of 32, placing it in the top 13% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Viewpoint - Coinbase is viewed as a balanced risk/reward opportunity for investors, with long-term growth potential in the cryptocurrency sector, according to Goldman Sachs analyst James Yaro [1][2]. Analyst Ratings and Price Targets - James Yaro assigned a Neutral rating to Coinbase with a price target of $195, while previous analyst Will Nance also rated it Neutral but with a higher price target of $350 [1]. Growth Potential - Yaro believes that Coinbase has long-term growth prospects as the cryptocurrency ecosystem expands, benefiting from both retail and institutional trading, as well as a growing subscription and services business [2][4]. Regulatory Environment - The current regulatory environment is seen as a double-edged sword; while it could support Coinbase's growth, it may also attract more competitors from the financial services sector, potentially impacting market share and pricing [3]. Valuation and Profitability - Coinbase's valuation is considered fair, trading close to the peer mean price-to-earnings ratio for brokerage exchanges and fintechs. The company is expected to achieve sustainable adjusted profitability even if cryptocurrency prices decline by up to 50% [4]. Subscription and Services Growth - The subscription and services segments are anticipated to grow over time, with stablecoins expected to see future upside. However, there is caution regarding the impact of interest rates on subscription revenue [5]. Stock Performance - As of the latest update, Coinbase's stock is down 1.13% to $187.60, with a year-to-date decline of 26% in 2025, and it has traded within a 52-week range of $146.14 to $349.75 [5].

Company Insights - Coinbase Global, Inc. (COIN) is currently an intriguing investment choice due to solid earnings estimate revisions and a strong industry ranking [1][3] - Over the past month, earnings estimates for the current quarter have increased from $2.15 to $2.18 per share, and for the current year, estimates have risen from $7.22 to $7.32 per share, indicating a positive outlook [4] Industry Overview - The Financial - Miscellaneous Services industry has a Zacks Industry Rank of 32 out of more than 250 industries, suggesting it is well-positioned compared to other segments [2] - The positive trends in the industry are likely benefiting multiple securities, indicating a rising tide effect [2][5]

Investment Rating - The report maintains a "Buy" rating for Coinbase Global with a target price of $245.00, representing a potential upside of 29.12% from the current price of $189.75 [3][19]. Core Insights - Coinbase experienced significant revenue growth in Q4 2024, with total revenue reaching $2.272 billion, exceeding market expectations by 22%. This growth was driven by a substantial increase in trading volume and stable fee performance [5][19]. - The total trading volume increased by 137% quarter-over-quarter, with retail trading volume rising by 176%. Non-BTC/ETH asset trading volume surged by 245%, contributing to market share expansion [5][19]. - Adjusted EBITDA reached $1.289 billion, with a profit margin of 56.82%, and adjusted EPS was $4.67, reflecting a year-over-year increase of 144% [5][19]. Financial Summary - Revenue projections for the fiscal years ending December 31st are as follows: - 2023: $3.108 billion - 2024: $6.564 billion - 2025E: $8.079 billion - 2026E: $8.286 billion - 2027E: $8.780 billion - Year-over-year growth rates are projected at: - 2023: -2.69% - 2024: 111.17% - 2025E: 23.08% - 2026E: 2.57% - 2027E: 5.95% [4][21]. Q1 2025 Guidance - Management provided guidance for Q1 2025, estimating subscription and service revenue between $685 million and $765 million. Total expenses for T&D and G&A are expected to be between $750 million and $800 million, while S&M expenses are projected at $235 million to $375 million [18][19]. - As of February 11, 2025, the company reported approximately $750 million in trading revenue [18]. Market Context - The report highlights that Coinbase's revenue is highly dependent on cryptocurrency price fluctuations, and potential market corrections could impact both trading volume and fees. Increased competition and regulatory uncertainties in the U.S. are also noted as potential challenges [19][5].

Market Overview - The crypto market experienced significant volatility, with cryptocurrencies falling double digits despite positive policy developments in the U.S. [1] - Coinbase Global and other crypto-related stocks were heavily impacted, with Coinbase shares dropping as much as 17.6% and Bitcoin miner Mara Holdings falling by 22.7% [2] Policy Developments - President Trump is set to reverse Biden-era anti-crypto policies, which could positively influence the crypto market [3] - The U.S. Stablecoins Act received bipartisan support in the Senate Banking Committee, indicating a more favorable regulatory environment for cryptocurrencies [3] Macro Economic Factors - The announcement of new tariffs by Trump, along with delays in some tariffs, raises concerns about a potential recession in the U.S. economy, affecting consumer spending and corporate cash reserves [5] - Increased uncertainty in the market typically leads to a "risk off" sentiment among investors, contributing to the decline in cryptocurrency values [6] Company-Specific Insights - For companies like Coinbase and Mara, a decline in crypto prices and trading activity could negatively impact their valuations, with trading revenue being particularly sensitive to market volatility [7][8] - Investors are advised to monitor Coinbase's blockchain revenue, as its primary revenue source is from crypto trading, which is affected by market conditions [8] Market Trends - The crypto market may have peaked earlier in the year, with a shift from speculative buying to selling based on regulatory news [9] - Long-term regulatory changes are seen as bullish for the industry, but current economic conditions suggest a challenging environment for crypto investors in the near term [9]