Coinbase (COIN) is up more than 15% after unveiling Q4 earnings yesterday after the market closed. The world’s leading cryptocurrency exchange easily outperformed compared to the market’s expectations.

Total revenue was up 41% to $954 million, well above the $826 million Wall Street was forecasting. Meanwhile, adjusted earnings of $1.04 not only blew the estimate of 2 cents out of the water – it also represented a dramatic turnaround from this time last year when the company posted a loss of $2.46.

This performance was bolstered by an uptick in transaction revenue, a 64% growth year over year to be specific. This can be attributed to hype around the approval of spot Bitcoin ETF. 

Plus, macroeconomic conditions are improving. It helps that popular crypto coins, like Bitcoin, have been surging recently as well. Bitcoin has climbed 42% in just the past few months, and Coinbase has benefited from this trend as more people are trading on the platform.

In fact, Coinbase sees 2024 as a year of growth potential. Looking ahead to the first quarter the goal is subscription and services revenue between $410 million to $480 million. Wall Street is expecting just $356.22 million.

There’s been speculation that the crypto platform could lose its footing in the market as traditional trading platform competitors like Robinhood and Fidelity bolster their crypto offerings. Vice President of Investor Relations Anil Gupta took the time to put those fears to rest.

Gupta says that worries of fee compression have existed for years, and to date, have had little to no effect on the company’s performance. The proof is in the pudding, too, as trading volumes are still climbing higher for Coinbase. The company grew volume to $154 billion in Q4 – a big step up from the $76 billion in Q3.

COIN has nearly doubled in value over the past 3 months, and looks like a whole new company after reaching a low point of just $33/share a little over a year ago. After climbing more than 15% today, is it time to buy COIN?

Not so fast. We’ve taken a look through the VectorVest stocks software and found 3 reasons it may not be time to buy this stock yet. Here’s what you need to know…

COIN May Have Excellent Timing and Fair Safety, But its Upside Potential is Very Poor

VectorVest saves you time and stress in your trading strategy while empowering you to win more trades. It’s all based on a simple proprietary stock rating system that’s comprised of 3 ratings: relative value (RV), relative safety (RS), and relative timing (RT).

Each sits on its own scale of 0.00-2.00 with 1.00 being the average. This allows you to quickly and easily analyze opportunities - but it gets even easier. You’re given a clear buy, sell, or hold recommendation based on the overall VST rating for any given stock at any given time. Here’s what we found for COIN:

  • Very Poor Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (forecasted three years out) to AAA corporate bond rates and risk. It offers much better insight than a simple comparison of price to value alone. COIN has a very poor RV rating of 0.25 right now.
  • Fair Safety: The RS rating is a risk indicator. It’s calculated from an analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, and price volatility. COIN is a fairly safe stock with an RS rating just below the average at 0.89.
  • Excellent Timing: The RT rating is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s calculated day over day, week over week, quarter over quarter, and year over year. As you can see from the stock’s performance in the short and long term, COIN has excellent timing, confirmed by the RT rating of 1.93.

The overall VST rating of 1.31 is very good for COIN, but it’s not enough to earn it a buy recommendation just yet. The stock is still rated a HOLD in the VectorVest system. 

But, you’re going to want to stay up to date on this opportunity as it’s evolving fast. Get a free stock analysis today to learn more and transform your trading strategy for the better!

Want These Types of Insights at Your Fingertips so You Can Win More Trades?

Use VectorVest to analyze any stock free. VectorVest is the only stock analysis tool and portfolio management system that analyzes, ranks and graphs over 18,000 stocks each day for value, safety, and timing and gives a clear buy, sell or hold rating on every stock, every day.

VectorVest advocates buying safe, undervalued stocks, rising in price. COIN has climbed more than 15% today after easily outperforming in the fourth quarter. The stock has very poor upside potential, fair safety, and excellent timing.

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