COIN Outpaces Industry in 3 Months: Time to Buy the Stock?

Core Insights - Coinbase Global Inc. (COIN) shares have increased by 33% over the past three months, outperforming the industry growth of 12.3%, sector increase of 7.1%, and the Zacks S&P 500 composite rise of 7.5% [1] - The company is positioned to benefit from increased market volatility and rising crypto asset prices, with a focus on becoming a platform for companies integrating cryptocurrency [2] - Coinbase is actively expanding its market share in both U.S. spot and derivatives markets, broadening its asset offerings and extending its global presence [4] Company Strategy - Coinbase has agreed to acquire Deribit, the leading crypto-options exchange, which will position it as the number one crypto derivatives platform globally by open interest [5] - The company is expanding into emerging markets like Argentina and India, while obtaining regulatory approvals in key financial centers such as Spain, France, Singapore, and Bermuda [6] - Coinbase aims to make USDC the dominant dollar-backed stablecoin worldwide, aligning with its international expansion strategy [7] Financial Performance - Coinbase closed 2024 with $10.2 billion in resources, an increase from $9.8 billion at the end of 2023, with a strong leverage ratio and higher times interest earned ratio indicating solid debt servicing ability [9] - The Zacks Consensus Estimate for 2025 and 2026 earnings has decreased by 52.5% and 16.7%, respectively, in the last 30 days [10] Valuation - The stock is currently trading at a price-to-earnings multiple of 28.45, which is higher than the industry average of 17.52, indicating a stretched valuation [12] - COIN is cheaper than Robinhood Markets but more expensive compared to Interactive Brokers Group [13]