Should You Buy COIN Stock At $260?

Coinbase Global (NASDAQ:COIN) has garnered significant attention recently, surging over 25% last week. This upward momentum followed its inclusion as the first crypto exchange stock in the broader S&P 500 index, taking the place of Discover Financial Services, which is in the process of being acquired by Capital One. Historically, the addition of a stock to a major benchmark index like the S&P 500 typically triggers an increase in its value due to the mandatory inclusion by funds that track the index.

The key question now is whether COIN stock presents a buying opportunity after its recent price surge. Despite its recent rise, at the current trading price of around $260, we maintain a positive outlook on the stock. While its present valuation appears somewhat elevated, we believe the underlying factors minimize cause for concern.

Our assessment is based on a comparative analysis of COIN stock’s current valuation against its operating performance in recent years, as well as its present and historical financial condition. Our evaluation of Coinbase Global across crucial parameters—Growth, Profitability, Financial Stability, and Downturn Resilience—reveals a company with robust operating performance and a strong financial foundation, as elaborated below.

However, for investors who seek lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

How Does Coinbase Global’s Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, COIN stock looks expensive compared to the broader market.

• Coinbase Global has a price-to-sales (P/S) ratio of 10.5 vs. a figure of 2.8 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 34.6 compared to 17.6 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 50.1 vs. the benchmark’s 24.5

How Have Coinbase Global’s Revenues Grown Over Recent Years?

Coinbase Global’s Revenues have grown considerably over recent years.

• Coinbase Global has seen its top line grow at an average rate of 16.4% over the last 3 years (vs. increase of 6.2% for S&P 500)
• Its revenues have grown 111.2% from $3.1 Bil to $6.6 Bil in the last 12 months (vs. growth of 5.3% for S&P 500)
• Also, its quarterly revenues grew 24% to $2.0 Bil in the most recent quarter from $1.6 Bil a year ago (vs. 4.9% improvement for S&P 500)

How Profitable Is Coinbase Global?

Coinbase Global’s profit margins are much higher than most companies in the Trefis coverage universe.

Does Coinbase Global Look Financially Stable?

Coinbase Global’s balance sheet looks very strong.

• Coinbase Global’s Debt figure was $4.3 Bil at the end of the most recent quarter, while its market capitalization is $68 Bil (as of 5/16/2025). This implies a strong Debt-to-Equity Ratio of 6.4% (vs. 21.5% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $10 Bil of the $22 Bil in Total Assets for Coinbase Global. This yields a very strong Cash-to-Assets Ratio of 46.7% (vs. 15.0% for S&P 500)

How Resilient Is COIN Stock During A Downturn?

COIN stock has fared worse than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.

Inflation Shock (2022)

• COIN stock fell 90.9% from a high of $357.39 on 9 November 2021 to $32.53 on 28 December 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $343.62 on 8 December 2024 and currently trades at around $260

Covid Pandemic (2020)

• COIN stock fell 35.5% from a high of $342.00 on 16 April 2021 to $220.61 on 19 July 2021, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 3 November 2021

Putting All The Pieces Together: What It Means For COIN Stock

In summary, Coinbase Global’s performance across the parameters detailed above are as follows:

• Growth: Extremely Strong
• Profitability: Very Strong
• Financial Stability: Extremely Strong
• Downturn Resilience: Weak
• Overall: Very Strong

Coinbase has exhibited strong performance across the aforementioned metrics. While its current valuation of 10 times trailing revenues exceeds that of the benchmark index, this premium appears justified by its exceptional sales growth of over 100% in the past year and the projected low double-digit average growth rate for the next few years.

Notably, the current price-to-sales (P/S) ratio is slightly below the stock’s average P/S ratio of over 12x for the last two years. Overall, we believe COIN stock remains attractive despite its recent appreciation.

However, investors should certainly be mindful of potential risks. The stock experienced a significant decline of over 90% during the most recent economic downturn (as shown above), indicating its susceptibility to substantial downside risk in the event of broader macroeconomic challenges that negatively impact the market.

While COIN stock looks promising, investing in a single stock can be risky. On the other hand, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.