3 Reasons We Love Coinbase (COIN)

Coinbase’s 37.1% return over the past six months has outpaced the S&P 500 by 31.9%, and its stock price has climbed to $386 per share. This performance may have investors wondering how to approach the situation.

Is now still a good time to buy COIN? Or are investors being too optimistic? Find out in our full research report, it’s free.

Why Is COIN a Good Business?

Widely regarded as the face of crypto, Coinbase (NASDAQ:COIN) is a blockchain infrastructure company updating the financial system with its trading, staking, stablecoin, and other payment solutions.

1. Eye-Popping Growth in Customer Spending

Average revenue per user (ARPU) is a critical metric to track because it measures how much the company earns in fees from each user. ARPU also gives us unique insights into the average transaction size on Coinbase’s platform and the company’s take rate, or "cut", on each transaction.

Coinbase’s ARPU growth has been exceptional over the last two years, averaging 58.2%. Its ability to increase monetization while growing its monthly transacting users demonstrates its platform’s value, as its users are spending significantly more than last year.

2. EPS Surges Higher Over the Last Two Years

Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.

3. Excellent Free Cash Flow Margin Boosts Reinvestment Potential

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

Coinbase has shown terrific cash profitability, driven by its lucrative business model and cost-effective customer acquisition strategy that enable it to stay ahead of the competition through investments in new products rather than sales and marketing. The company’s free cash flow margin was among the best in the consumer internet sector, averaging 25.9% over the last two years.

Final Judgment

These are just a few reasons Coinbase is a rock-solid business worth owning, and with its shares topping the market in recent months, the stock trades at 30.1× forward EV/EBITDA (or $386 per share). Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Stocks We Like Even More Than Coinbase

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.

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