Coinbase(US:COIN) ZACKS·2025-05-14 09:00Group 1: Coinbase Stock Performance - Coinbase shares surged 24% on May 13, 2025, marking the largest one-day gain since the day after Donald Trump's election victory, following the announcement of its inclusion in the S&P 500 Index [1] - The stock experienced a rough year with drops of 26% in February and 20% in March, but the recent rally has brought the stock down only 0.1% year-to-date [6] - The stock soared 31% on November 6, 2024, after the election, due to expectations of a favorable stance toward cryptocurrency from the new administration [5] Group 2: S&P 500 Inclusion and Financial Performance - Coinbase was added to the S&P 500 Index, replacing Discover Financial Services, which is being acquired by Capital One Financial [1] - To qualify for the S&P 500, a company must be profitable in its latest quarter and cumulatively over the previous four quarters; Coinbase met these requirements with a net income of $65.6 million, down from $1.18 billion a year ago, while revenues rose 24% year-over-year to $2.03 billion [3][4] Group 3: ETF Exposure and Market Sentiment - Coinbase has significant exposure to ETFs, with several ETFs investing over 10% of their portfolios in COIN shares, leading to notable gains in these ETFs on May 13 [2] - The broader crypto market is experiencing a boom, with Bitcoin surpassing $100,000, which has positively impacted sentiment around Coinbase and other crypto-linked assets [8] Group 4: Strategic Moves and Future Outlook - Coinbase announced a $2.9 billion acquisition of Deribit, a major crypto derivatives exchange, which is expected to enhance its global presence and diversify revenue streams [9] - Analysts have cut their earnings estimates for COIN shares significantly over the past week, indicating potential concerns about the stock's future performance [10] - COIN shares are trading at a P/E ratio of 29.52X, significantly higher than the underlying industry average of negative 8.75X, raising concerns about overvaluation [11]