Here is What to Know Beyond Why Coinbase Global, Inc. (COIN) is a Trending Stock

Coinbase Global, Inc. (COIN) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.Over the past month, shares of this company have returned +36.1%, compared to the Zacks S&P 500 composite's +5.4% change. During this period, the Zacks Financial - Miscellaneous Services industry, which Coinbase Global falls in, has gained 12.8%. The key question now is: What could be the stock's future direction?Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.For the current quarter, Coinbase Global is expected to post earnings of $0.82 per share, indicating a change of -23.4% from the year-ago quarter. The Zacks Consensus Estimate has changed -10.9% over the last 30 days.The consensus earnings estimate of $2.9 for the current fiscal year indicates a year-over-year change of -61.8%. This estimate has changed -4% over the last 30 days.For the next fiscal year, the consensus earnings estimate of $6.16 indicates a change of +112.4% from what Coinbase Global is expected to report a year ago. Over the past month, the estimate has changed -5.5%.With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Coinbase Global.The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:12 Month EPSProjected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.For Coinbase Global, the consensus sales estimate for the current quarter of $1.51 billion indicates a year-over-year change of +4%. For the current and next fiscal years, $6.8 billion and $7.35 billion estimates indicate +3.6% and +8% changes, respectively.Last Reported Results and Surprise HistoryCoinbase Global reported revenues of $2.03 billion in the last reported quarter, representing a year-over-year change of +24.2%. EPS of $1.94 for the same period compares with $1.65 a year ago.Compared to the Zacks Consensus Estimate of $2.12 billion, the reported revenues represent a surprise of -4.12%. The EPS surprise was +4.86%.Over the last four quarters, Coinbase Global surpassed consensus EPS estimates three times. The company topped consensus revenue estimates two times over this period.ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.Coinbase Global is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Coinbase Global. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.One Big Gain, Every Trading DayTo help you take full advantage of this market, you’re invited to access every stock recommendation in all our private portfolios - for just $1.Zacks private portfolio services that closed 256 double and triple-digit winners in 2024 alone. That’s about one big gain every day the market was open. 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