Analyzing the Future of Coinbase Global Stock

Shares of Coinbase Global shot up to $207.6 during today's morning trading session -- an increase of 4.2% that brings the stock 53130.77% over its average analyst target price of $0.39. This may imply limited upside for the Diversified Financial stock, whose analysts give it a consensus rating of hold, and target prices spanning from $0.39 to $0.39 dollars per share.

To understand the market's outlook on the stock, we can look at Coinbase Global's short interest: the proportion of the fshare float that is tied to short positions. Behind each short position is an investor who believes that the stock will decline in the future. Here, the stock's short interest is 5.4% 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, 53.6% 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.

In conclusion, we see mixed market sentiment regarding Coinbase Global because of an analyst belief that shares are overpriced, a hold 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:

  • The stock has trailing 12 month earnings per share (EPS) of $5.11

  • Coinbase Global has a trailing 12 month Price to Earnings (P/E) ratio of 40.6 compared to the S&P 500 average of 15.97

  • The company has a Price to Book (P/B) ratio of 6.31 in contrast to the S&P 500's average ratio of 2.95

  • Coinbase Global is a Finance company, and the sector average P/E and P/B ratios are 12.38 and 1.58 respectively

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.