As Bitcoin Tumbles, Are These 2 Stocks Finally Undervalued?

: COIN | Coinbase Global Inc. News, Ratings, and Charts

COIN – he challenging macroeconomic and geopolitical environment has hammered the crypto market. Moreover, the anticipation of further rate hikes is expected to keep the risky markets volatile in the near term. Crypto stocks Coinbase Global, Inc. (COIN) and Marathon Digital Holdings, Inc. (MARA) are down more than 60% year-to-date, but they still look overvalued, considering their fundamental weakness. So, these stocks are best avoided now. Let’s discuss….

The stock market has witnessed significant volatility since the beginning of the year due to the challenging macroeconomic and geopolitical environment. The crypto market fared even worse, with Bitcoin and Ethereum declining more than 55% year-to-date.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said, “Although at $21,800, Bitcoin is still some way off its June lows of under $19,000, volatility is once again wracking the market.”

The possibility of continued aggressive interest rate hikes to bring the elevated inflation down to the Fed’s target level could drive further volatility in the stock and crypto market.

Crypto stocks Coinbase Global, Inc. (COIN - Get Rating) and Marathon Digital Holdings, Inc. (MARA - Get Rating), which have declined more than 60% year-to-date, still look overvalued at their current price levels, considering their weak fundamentals. Therefore, these stocks are best avoided now.

Coinbase Global, Inc. (COIN - Get Rating)

COIN is a financial technology company that provides end-to-end economic infrastructure and technology. The company offers the primary financial account in the crypto economy for retailers, a marketplace with a pool of liquidity for transacting in crypto assets for institutions, and technology and services that enable ecosystem partners to build crypto-based applications and securely accept crypto-asset payments.

On July 21, 2022, the SEC announced insider trading charges against COIN’s former employee Ishan Wahi, accusing him of leaking information to his brother Nikhil Wahi and friend Sameer Ramani that COIN would list at least 25 crypto assets for trading on its platform.

COIN’s net revenue for the fiscal second quarter ended June 30, 2022, declined 63.7% year-over-year to $808.32 million. Its total operating expenses increased 36.9% year-over-year to $1.85 billion. The company’s net loss came in at $1.09 billion, compared to a net income of $1.61 billion in the year-ago period. Also, its loss per share came in at $4.98, compared to an EPS of $6.42 a year ago.

In terms of forward EV/S, COIN is currently trading at 4.13x, 41.4% higher than the industry average of 2.92x. Its forward P/S multiple of 4.74x is 61.4% higher than the industry average of 2.93x. In addition, the stock’s forward P/B ratio of 3.23x is 168.7% higher than the industry average of 1.20x.

Analysts expect COIN’s EPS to remain negative for fiscal 2022. Its revenue for the quarter ending September 30, 2022, is expected to decline 49.4% year-over-year to $663.73 million. The stock has lost 71.7% year-to-date to close the last trading session at $71.37.

COIN’s weak fundamentals are reflected in its POWR Ratings. It has an overall F rating, equating to a Strong Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

It has an F grade for Growth, Value, Stability, and Sentiment. It is ranked #152 out of 153 stocks in the F-rated Software – Application industry. Click here to see the other ratings of COIN for Momentum and Quality.

Marathon Digital Holdings, Inc. (MARA - Get Rating)

MARA is a digital asset company that focuses on the blockchain ecosystem and the generation of digital assets. The company holds bitcoins in an investment fund.

On August 1, 2022, MARA expanded its credit facility by increasing its existing debt funding capacity by $100 million. This debt facility is expected to increase the company’s debt burden.

MARA’s revenues for the fiscal second quarter ended June 30, 2022, decreased 15% year-over-year to $24.92 million. Its operating loss widened 61.6% from the year-ago value to $178.21 million. The company’s net loss came in at $191.65 million, widening 76% from the year-ago period, while its adjusted EBITDA loss widened 40.1% year-over-year to $147.20 million. Also, its loss per share widened by 60.5% year-over-year to $1.75.

In terms of forward EV/S, MARA is currently trading at 12.17x, 314.5% higher than the industry average of 2.94x. Its forward EV/EBITDA multiple of 31.85x is 142.3% higher than the industry average of 13.14x.

Analysts expect MARA’s EPS to remain negative for fiscal 2022. Its revenue for the quarter ending September 30, 2022, is expected to decline 41.3% year-over-year to $30.35 million. It has failed to surpass the consensus EPS estimates in three of the trailing four quarters. The stock has lost 60.8% year-to-date to close the last trading session at $12.88.

MARA’s weak fundamentals are reflected in its POWR Ratings. It has an overall F rating, equating to a Strong Sell in our proprietary rating system.

It has an F grade for Growth, Value, Stability, Sentiment, and Quality. Click here to see the rating of MARA for Momentum.

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year


COIN shares were trading at $66.58 per share on Friday morning, down $4.79 (-6.71%). Year-to-date, COIN has declined -73.62%, versus a -12.74% rise in the benchmark S&P 500 index during the same period.


About the Author: Shweta Kumari


Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
COINGet RatingGet RatingGet Rating
MARAGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Why is Stock Market Outlook So Uncertain?

The S&P 500 (SPY) has quickly pushed back from the highs and once again on the verge of a break below the 100 day moving average. Why is this happening? And what comes next? 40 year investment veteran Steve Reitmeister shares his view and top stocks in the commentary that follows...

3 Under-the-Radar Tech Stocks Quietly Powering the Digital Revolution

The technology industry's future seems promising, owing to increasing investments and rising worldwide demand for better products. Hence, investing in fundamentally stable tech stocks, Motorola (MSI), Power Integrations (POWI), and CI&T (CINT) could be the move for investors looking to capitalize on the sector's growth. Read on…

3 AI-Powered Drug Discovery Stocks Revolutionizing Medicine

The pharmaceutical industry is evolving continuously with the advancements in drug discovery with Artificial Intelligence (AI), propelling the industry’s growth. Amid this backdrop, quality medical stocks Pfizer (PFE), AstraZeneca (AZN), and Novartis (NVS), which are transforming medicine with AI-powered drug discovery, could be ideal portfolio additions. Continue reading...

3 Metaverse Stocks Building the Virtual Economy

The metaverse isn’t just a futuristic fantasy; it’s shaping up to be the next big digital economy. As digital spaces evolve into thriving marketplaces, companies like Apple (AAPL), NVIDIA Corp. (NVDA), and Meta Platforms (META) are building the foundation for this new era. Thus, investing in them could be rewarding. Read more…

Trump or the Fed More Important to Stock Investors?

The S&P 500 (SPY) is flirting with new highs once again. But it is not very clear what is driving these stock price gains. That is why Steve Reitmeister shares his latest views including a market outlook, trading plan and top picks to stay on the right side of the action.

Read More Stories

More Coinbase Global Inc. (COIN) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All COIN News