Last year, Coinbase made history when it became the first major cryptocurrency company to go public. It took the market by storm as big players such as ARK Invest jumped in to take advantage of such a unique opportunity. Coinbase has now been trading in the public markets for a year now and in that time has had its own fair share of ups and downs. We take a look at the Coinbase stock in this report and how it is performing one year later.
Not A Good Year For Coinbase
When Coinbase first made its debut in the public markets in April of 2021, it was welcome with open arms. The company had opened at a trading value of $380 and enjoyed success in the first few months following the listing. An important component of the Coinbase listing had been the fact that it had listed when the crypto market was still in bull rally mode. This had helped to propel the value of the stock, as well as increase faith in the stock’s future potential.
However, this would not last long given the market, in true crypto fashion, had begun to fluctuate lower. Given that Coinbase is a crypto company, the value of its stock seemed to closely tie into the performance of the crypto market and this had affected its share price. What would follow would be months of low performance for the stock.
Coinbase stock price down 62% | Source: Arcane Research
This low performance had seen the price of the stock fall below its summer lows from last year. As of today, the price of the company’s stock has fallen 62% lower than its listing price to be trading at $153.
The crypto market’s performance is the main culprit for this but it is not solely to blame. Fierce competition has been coming out of the crypto market with the approval of various ETPs/ETFs which provide investors access to crypto exposure through traditional avenues. Others such as private investors have been pouring money directly into the crypto market, preferring to take their chance through direct exposure to the market rather than through traditional finance offerings.
Down But Not Out
Coinbase’s low performance for the past few months may be concerning but it does not spell doom for the digital asset in any way. The first point to address is the fact that the value of the stock seems to closely follow the crypto market performance, which is known to recover as quickly as it declined. If this continues, then the price of the company’s stock will recover along with the next bull rally.
Coinbase stock trading at $153 | Source: COINBASEUSD on TradingView.com
Additionally, the fundamental metrics for the company remain strong even during these times. Looking at the income, Coinbase recorded $840 million in net income in the last quarter of 2021. This comes out to $3.32 per diluted share for the same time period. Its verified user base continues to grow since it went public. In Q4 of 2021, recording a jump from 58 million to 89 million verified users.
One thing to keep in mind though is the PE of Coinbase. It is currently sitting at a 10.22. This is a conservative PE compared to other others in the same tech sector.
Featured image from Banking Exchange, chart from TradingView.com