Meet the Newest Stock in the S&P 500: It Has Soared 640% Since 2023 and Is Still a Buy in 2025, According to Certain Wall Street Analysts

Group 1: Company Overview - Coinbase Global will be added to the S&P 500 index on May 19, 2023, with a stock price increase of 643% since January 2023, and analysts project further gains [1] - Coinbase operates the largest cryptocurrency exchange in the U.S. and the third largest globally by trading volume, generating revenue from transaction fees, services, and subscriptions [7] Group 2: Financial Performance - In Q1, Coinbase reported a 24% increase in revenue to $2 billion, driven by strong subscription and services momentum, although transaction volume decline limited faster growth [8] - Non-GAAP earnings fell 23% to $1.94 per diluted share due to rising operating expenses [8] Group 3: Market Expectations and Trends - Historically, stocks added to the S&P 500 have averaged a 12% return in the year following inclusion, suggesting a similar potential for Coinbase [4] - The S&P 500 is seen as a key indicator of the U.S. stock market, tracking 500 large companies that represent 80% of domestic equities by market value [3] Group 4: Strategic Moves - Coinbase plans to acquire Deribit, the largest cryptocurrency options exchange, for $2.9 billion, positioning itself to capitalize on the growing popularity of Bitcoin and Ethereum options [9] - Morningstar projects the cryptocurrency market to reach $7.8 trillion by 2035, indicating a potential 136% upside from its current value of $3.3 trillion [10] Group 5: Valuation and Future Outlook - Wall Street anticipates Coinbase's earnings to grow at an annual rate of 19% through 2026, although the current valuation of 49 times earnings appears expensive [11] - Analysts have set target prices for Coinbase at $400 per share, implying a 52% upside from the current price of $263 [1]