Why Coinbase Global Stock is Gaining Fresh Interest
Coinbase Global (COIN) has re-emerged as a point of interest for investors following a period of disappointing returns, which included negative performance in recent weeks, as well as over the past month and three months.
View our latest analysis for Coinbase Global.
The recent decline in share prices, including pullbacks over the last week and 90 days, comes alongside a lackluster year-to-date return. However, there is still a substantial three-year total shareholder return. These factors imply that momentum has slowed after a significant multi-year growth period as the market reevaluates growth potential and risks associated with cryptocurrency activities.
If Coinbase Global’s fluctuations raise concerns about diversification, now might be a good time to explore other high-growth technology and AI companies through high growth tech and AI stocks.
With the recent drop in Coinbase Global’s stock price, a still-impressive three-year total return, and a consensus price target significantly above its last close, one must consider: is this a realignment, or is future growth already integrated into the pricing?
The Most Common Narrative: 43.4% Undervalued
The prevailing narrative suggests that Coinbase Global’s stock is undervalued by 43.4%, with a fair value estimated at $383.46, based on extensive revenue and margin predictions.
The introduction and uptake of in-house blockchain platforms like Base and the Base super app could enhance user growth through innovative on-chain utilities (e.g., blockchain-based identity, creator monetization, DeFi services). This could promote ecosystem loyalty and possibly boost net margins as service-oriented revenues grow.
The foundation of this valuation is based on precise growth projections, a recalibrated earnings mix, and a future earnings multiple that aligns more closely with high-growth platforms than traditional brokers.
Outlook: Cash Flows Suggest a Different Perspective
This 43.4% undervalued outlook contrasts with our DCF model, which calculates Coinbase Global’s future cash flow value at $109.05 per share, indicating that the stock may be overvalued. Which perspective aligns more closely with your outlook?
Learn how the SWS DCF model derives its fair value.
Simply Wall St conducts a discounted cash flow (DCF) analysis on every stock daily (check out Coinbase Global for instance). The entire calculation is available to view. You can monitor the results in your watchlist or portfolio and receive alerts when changes occur, or utilize our stock screener to discover 867 undervalued stocks based on their cash flows. If you save a screener, you will be alerted when new companies match your criteria, ensuring you do not miss any potential opportunities.
Craft Your Own Coinbase Global Narrative
If what you have read doesn’t align with your beliefs or if you wish to verify the numbers yourself, you can construct a custom thesis in just a few minutes by starting with Do it your way.
A good starting point for your Coinbase Global research is our analysis that highlights 3 key rewards and 2 important warning signs that could influence your investment decisions.
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This article from Simply Wall St is general in nature. We provide insights based on historical data and analyst forecasts using an unbiased methodology. This content does not constitute financial advice or a recommendation to buy or sell any stock and does not account for your objectives or financial situation. We aim to provide long-term analysis driven by fundamental data. Please note that our analysis may not incorporate the latest price-sensitive announcements or qualitative information. Simply Wall St has no positions in any of the stocks mentioned.
