Bitcoin craters Nearly 40% in June, time to dump coin base stocks?

Shares of the cryptocurrency exchange Coinbase Global (COIN) lost significantly, and Bitcoin witnessed the largest monthly fall since 2011 last month. The decline in retail crypto transactions and the company’s poor finances hurt investors’ sentiment about the stock. So, is COIN a purchase at the current price level, or are there further disadvantages left? Read on….

Trading and investment platform for cryptocurrency Coinbase Global, Inc. (COIN) offers users the ability to buy, sell and exchange over 100 tradable cryptocurrencies. The stock has fallen 16.9% in the last month and 78% so far this year.

A massive cryptocurrency sale for fear of the Fed’s sharp rise in interest rates and the subsequent decline in retail transactions led COIN to witness this poor performance. The largest cryptocurrency by market value, Bitcoin lost 37.3% in Junethe largest monthly price drop since 2011. This triggered the job across the crypto industry.

Last month, COIN said it would cut about 18% of the workforce due to the downturn in the crypto industry. CEO of COIN and Brian Armstrong“A recession could lead to another crypto winter, and could last for a longer period.”

Here’s what can shape COIN’s performance in the short term:

Weak economy

COIN’s total revenue fell by 35.2% year – on – year to $ 1.17 million during the first quarter of 2022. operating deficit amounted to $ 554.46 million compared to an operating income of $ 987.71 million. The company’s net loss was $ 429.66 million compared to a net income of $ 301.90 million. The company’s loss per share amounted to $ 1.98 compared to an EPS of $ 3.05 in the previous period.

Premium Valuation

At 1.99x forward Price / Book, the stock is currently trading above 1.13x the industry average.

Gloomy growth prospects

Analysts expect COIN’s revenues to fall by 50.4% this quarter, 48.1% this year and 25.2% next year. However, the company’s EPS is expected to decline 136.9% in the current quarter, 213% in the next quarter and 151% in the current year.

POWR rankings reflect bleak prospects

COIN has an overall D-grade, which corresponds to Sell in our proprietary POWR ratings system. The POWR assessments are calculated by assessing 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight different categories. COIN has an F rating for growth and sentiment. The growth grade is justified given the disappointing economy. The sentiment rating is in line with the gloomy earnings estimates.

Among the 157 shares in F-rated Software – ApplicationCOIN is ranked # 122.

In addition to what I said above, we have rated COIN for growth, stability and quality. Get all COIN ratings here.

The bottom line

The stock is currently trading below the 50-day and 200-day moving averages of $ 75.38 and $ 195.37, respectively, indicating a downward trend. Since the crypto market is expected to remain under pressure due to recession fears, COIN is best avoided now.

How does Coinbase Global, Inc. (COIN) stack up against its peers?

COIN has an overall POWR rating of D, which corresponds to Sell. Check out these other stocks in the software application industry with A (strong buy): Commvault Systems, Inc. (CVLT), Rimini Street Inc. (RMNI), and American Software, Inc. (AMSWA).

COIN shares were trading at $ 53.87 per share on Wednesday morning, down $ 1.54 (-2.78%). So far this year, COIN has fallen -78.65%, against a -18.88% rise in the benchmark S&P 500 in the same period.

About the Author: Spandan Khandelwal

Spandan’s is a financial journalist and investment analyst with a focus on the stock market. With her ability to interpret financial data, she aims to help investors assess the basics of a company before investing.

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