Coinbase Global Inc. shares had increased by about 45% in June as of Thursday. Although it may initially appear to be a pricey company, consensus projections suggest that devoted investors could reap significant rewards in the coming years.
The fact that Coinbase (COIN) was included in the S&P 500 SPX in May is one factor contributing to the stock’s recent surge. This indicates that the shares have been purchased by index funds such the $1.4 trillion Vanguard S&P 500 ETF VOO and the $630 billion SPDR S&P 500 Trust SPY.
According to analysts surveyed by FactSet, the company that offers services to investors and traders of bitcoin (BTCUSD) and other virtual currencies is predicted to generate $7.37 billion in revenue this year, or $5.28 per share. It is anticipated that these numbers would increase to EPS of $7.80 on $8.15 billion in sales in 2026 and EPS of $9.04 on $8.83 billion in sales in 2027.
The forward price-to-earnings ratio, which is calculated by dividing a company’s share price by the consensus earnings-per-share forecast for the upcoming year, is the most often used stock valuation tool. Because of this, Coinbase seems pricey: Its forward P/E ratio at the close of Thursday was 57.7, while the S&P 500’s weighted forward P/E ratio was 22.
On the same rolling 12-month basis, we can also examine price-to-sales ratios. Coinbase’s forward P/S ratio was 11.7, while the index’s weighted P/S ratio was 3.
Earnings growth for Coinbase is anticipated to be substantially faster than that of the S&P 500 overall. Additionally, analysts will increase their projections for sales and/or earnings if the company reveals results that exceed expectations, which could support additional price increases.
The latest stablecoin craze has also affected the crypto-trading portal. Following last week’s debut of Coinbase Payments, which it characterized as “a stablecoin payments stack designed for commerce platforms,” the stock had risen 27% through Thursday, establishing a new record high.
However, in Friday afternoon trade, Coinbase’s stock was down about 7%. Only three weeks after its highly anticipated IPO, stablecoin player Circle Internet Group Inc. (CRCL) saw a decline in its stock price, which was down more than sixteen percent in afternoon trade. Coinbase and Circle co-launched the USDC stablecoin (USDCUSD) in 2018. In 2023, Circle assumed complete authority of USDC issuance and governance, although Coinbase continues to invest in the business.
Oppenheimer, an analyst company, increased its price objective for Coinbase this week from $293 to $395.
“After the IPO of CRCL and the creation of many crypto treasury funds (e.g. BTC, ETH, TRON), there is a focus on consumer payments, treasury funds and [decentralized finance],” Owen Lau, an analyst at Oppenheimer, wrote. “Sentiment has continued to improve, and we expect more innovation, more partnership between [traditional finance] and crypto-native ventures, and more capital going into this space.”
Lau went on to say that Coinbase is in a good position to gain from additional blockchain usage.
Coinbase has been mentioned as a benefactor of a Trump administration that is supportive of cryptocurrency, along with Robinhood Markets Inc. (HOOD) and Strategy Inc. (MSTR). However, during President Trump’s first 100 days in office this year, Bitcoin declined.
