Coinbase (COIN): 3 Reasons We Love This Stock

What a fantastic six months it’s been for Coinbase. Shares of the company have skyrocketed 43.3%, hitting $309.02. This performance may have investors wondering how to approach the situation.

Is it too late to buy COIN? 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 56.8%. 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.

For Coinbase, its two-year annual EPS growth of 96.4% was higher than its four-year trend. This acceleration made it one of the faster-growing consumer internet companies in recent history.

3. Excellent Free Cash Flow Margin Boosts Reinvestment Potential

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

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 25.7% over the last two years.

Final Judgment

These are just a few reasons why we think Coinbase is a great business, and after the recent surge, the stock trades at 25.8× forward EV/EBITDA (or $309.02 per share). Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More Than Coinbase

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

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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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.

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