COIN Loses 8.4% in a Year, Trades at a Premium: How to Play the Stock

Shares of Coinbase Global Inc. COIN have lost 8.4% in a year compared with its industry’s decrease of 12.6%. The sector has risen 16% and the Zacks S&P 500 composite has risen 19.7% in the same time frame. 

As the largest registered crypto exchange in the United States, Coinbase is well-placed to take advantage of increased market volatility and rising crypto asset prices. As the United States positions itself as a global crypto hub, COIN’s ambition to become an all-encompassing exchange for the industry appears well aligned.  Coinbase is poised for a strong 2026 as it executes on its long-term strategic roadmap.  

1-Year Price Performance

Robinhood Markets HOOD, a crypto-oriented company, has gained 154.5% in a year, while Interactive Brokers Group, Inc. IBKR has gained 57.1% in the same time frame.

Robinhood has evolved from a brokerage firm mainly trading in digital assets to a more mature and diversified entity, striving to widen its market and reach. Robinhood continues to diversify its product base to acquire new clients and gain market share. 

Interactive Brokers is known for its advanced electronic trading platforms and global market access. The company leverages proprietary systems to automate nearly every aspect of the brokerage process — from trade execution and risk management to compliance and customer onboarding. This enables Interactive Brokers to operate with minimal human intervention and significantly lower costs than traditional brokers.

Coming back to Coinbase, should you consider adding the stock to your portfolio based on positive price movements only? Let’s delve deeper.

The Case for COIN

Coinbase is pursuing growth by expanding its U.S. spot and derivatives market share while broadening its product offerings and global presence. The company continues to list new cryptocurrencies and tokenized equities, consistently evaluating and launching digital assets to support a pro-crypto ecosystem.

In 2026, Coinbase plans to emphasize real-world asset (RWA) perpetuals, specialized exchanges and trading terminals, next-generation decentralized finance infrastructure, and the integration of artificial intelligence and robotics. These initiatives aim to build a comprehensive, interconnected product ecosystem and strengthen the company’s industry leadership.

From a financial perspective, Coinbase remains fundamentally sound, supported by strong liquidity and ongoing debt reduction, which has improved its total debt-to-capital ratio. However, the issuance of $2.6 billion in convertible notes raises concerns about potential shareholder dilution and higher financial leverage.

Also, crypto asset price risk could adversely impact operating results. A decline in the market price of Bitcoin, Ethereum and other crypto assets could hurt earnings, the carrying value of crypto assets and future cash flows. This may also affect liquidity and the ability to meet ongoing obligations. The price of crypto assets and associated demand for buying, selling and trading crypto assets have historically been subject to significant volatility. 

Coinbase is investing in the business to fund expansion and growth. Accordingly, in the past few quarters, technology and development, sales and marketing, and general and administrative expenses have ticked up.  Additionally, because of pricing pressure on some assets (declines in the market value of certain digital assets held on its balance sheet), COIN continues to take crypto asset impairment charges, while streamlining actions are resulting in some restructuring and other operating expense as well.

Muted Analyst Sentiment for COIN

The Zacks Consensus Estimate for 2026 earnings has moved 2% south in the past seven days.

The Zacks Consensus Estimate for 2026 revenues implies a 12.5% increase but that for earnings suggests a 27.5% year-over-year decrease.

COIN Shares Are Expensive

COIN shares are trading at a premium to the industry. Its 12-month forward price-to-earnings of 43.63 is much higher than the industry average of 22.37X. It is, however, trading lower than its median of 51.30.

Its Value Score of F suggests that the stock is not so cheap and indicates a stretched valuation at this moment.

What Should Investors Do?

Coinbase’s emphasis on expanding the overall crypto market, increasing spot trading share across both retail and institutional platforms, and continuously improving the trading experience through innovation is expected to support stronger growth. Increasing average USDC balances, a higher USDC market capitalization, and firmer average crypto prices also point to improved revenue stability.

Nevertheless, risks persist. Reduced market volatility or declines in the prices of Bitcoin, Ethereum, and other digital assets could put pressure on earnings, asset values, future cash flows, and liquidity, potentially impacting the company’s ability to meet its financial obligations.

Given its premium valuation, projected declines in earnings, pessimistic analyst sentiment and a VGM Score of F, it is better to stay cautious on this Zacks Rank #3 (Hold) stock presently. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research