During today's morning trading session, Coinbase Global plummeted to $240.9 per share. It's still 58656.1% above its mean target price of $0.41, so there may still be room for more downwards movement -- even after today's -3.5% drop. Analysts are giving the Diversified Financial stock on average rating of buy, with target prices ranging from 0.41 to 0.41 dollars per share.
For the greater market's outlook on the stock, we can use Coinbase Global's short interest as a proxy. The short interest represents the proportion of the float's shares that are tied to short positions, meaning that the investor believes the stock will decline in the future. Here, the stock's short interest is 6.4% which means the outlook is split.
Short selling involves borrowing shares and then selling them at current market prices. In the successful version of the strategy, the shares are purchased at a lower price at some time in the future. The investor then returns the shares to the lender, and keeps the profit made on the sell/buy transaction.
Another way to gauge the sentiment on Coinbase Global is to look at the percentage of institutions that are invested in the stock. In this case, 54.4% of the shares are held by pension, mutual, and hedge funds, which shows that these institutions probably have strong confidence in the stock.
If institutions are invested in a particular stock, it shows in most cases that they have performed quality research and concluded that it is a good investment. In some cases, however, increases in institutional ownership could be a sign of a takeover attempt or proxy fight, which can actually injure share prices. Also, institutions are not infallible, and can certainly make miscalculations -- often with spectacular results.
To sum up, Coinbase Global is probably the subject of mixed market sentiment because of an analyst belief that shares are overpriced, a buy rating, an average amount of shares sold short, and an average number of institutional investors. At Market Inference, we believe that any investment decision should be preceded by an in-depth analysis of the company's fundamental values and a comparison with similar stocks.
Here's a snapshot of some important facts to keep in mind about COIN:
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The stock has trailing 12 month earnings per share (EPS) of $0.36
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Coinbase Global has a trailing 12 month Price to Earnings (P/E) ratio of 669.2 compared to the S&P 500 average of 15.97
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The company has a Price to Book (P/B) ratio of 9.28 in contrast to the S&P 500's average ratio of 2.95
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Coinbase Global is a Finance company, and the sector average P/E and P/B ratios are 12.38 and 1.58 respectively
