![]() ![]() However, the cryptocurrency market is inherently cyclical, and the odds are that we could be approaching a market peak given the Fed’s stance on interest rates. For perspective, Coinbase’s net margins stood at an incredible 57% over the first three quarters of 2021. So is Coinbase stock a buy following the sizeable correction? The stock currently trades at just about 22x our projected 2021 earnings, which is not a particularly rich valuation for a highly profitable and futuristic stock with solid long-term earnings potential. The Fed’s stance appears to have also impacted cryptocurrency prices, with bellwether crypto bitcoin down by about 20% over the past month. Separately, investors have likely been reducing exposure to high-growth stocks, such as Coinbase, due to rising inflation and an increasingly hawkish stance by the Federal Reserve, which has indicated that it could consider speeding up the tapering of its large-scale bond-buying at its next meeting. Firstly, Coinbase’s Q3 results – which were reported in early November – missed expectations due to some weakness in the number of transacting users and trading volumes. There are a couple of factors driving the weakness in the stock. Should You Buy Coinbase Stock Following Recent Sell-Off?Ĭoinbase stock (NASDAQ: COIN) has declined by almost 26% over the last month trading at levels of around $264 per share, considerably underperforming the S&P 500 which declined about 3% over the same period. Also, check out our analysis on Coinbase Revenues: How Does COIN Make Money? for details on the company’s key revenue streams and how they have been trending.īelow you’ll find our previous coverage of Coinbase stock where you can track our view over time. See our analysis on Coinbase Valuation: Expensive or Cheap? for more details on Coinbase’s valuation. ![]() Coinbase has built a solid reputation for transparency, security, and compliance, and this could make it the go-to platform as bitcoin and other cryptos continue to gain traction. However, we still remain bullish on Coinbase, with our price estimate standing at about 35% over the current market price. ![]() Considering this, we have revised our price estimate for COIN stock from around $300 per share to about $240 per share. This could mean that Coinbase’s revenue growth could be muted, with the stock likely to remain out of favor with investors. ![]() With interest rate hikes and tighter monetary policy on the horizon, investors will likely prioritize productive, cash flow-yielding assets, over cryptos. However, the cryptocurrency market is cyclical, and 2022 doesn’t look like a particularly promising year. For perspective, Coinbase’s net margins stood at a solid 57% over the first three quarters of 2021. So is it time to buy Coinbase stock following this big sell-off? The stock currently trades at just about 15x our projected 2021 earnings, which is not exactly a rich valuation for a highly profitable and futuristic stock with solid long-term earnings potential. Moreover, cryptocurrency prices have also seen a reasonably sharp decline, with bellwether crypto bitcoin down almost 40% from its recent highs, likely translating into lower transaction volumes and revenues for Coinbase. Federal Reserves plans multiple interests rate hikes for this year. The sell-off comes as investors reduce their allocation to growth stocks and futuristic names as the U.S. The stock now trades well below the $250 reference price for its 2021 IPO. Coinbase stock (NASDAQ: COIN) has declined by almost 30% year to date in 2022 and remains down by almost 50% from its all-time highs seen in November 2021, to levels of about $178 per share. ![]()
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