2 Stocks to Avoid if You Don't Want to Lose Money

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

COIN – The Fed’s hawkish stance has increased the odds of the economy tipping into a recession. Therefore, it could be wise to avoid fundamentally weak crypto-focused stocks Coinbase Global (COIN) and Riot Blockchain (RIOT), as they are not well-positioned to survive the market uncertainties. Read on….

The stock market has been under pressure on concerns over a possible recession because the Fed intends to keep raising interest rates. Last week all major stock indexes closed in the red for the third straight week. A solid August jobs report failed to ease fears of aggressive interest rate hikes.

Moreover, cryptocurrencies have suffered a brutal sell-off this year. Bitcoin, the world’s largest cryptocurrency by market cap, has declined significantly to hover below $19,000 as investors are in a risk-off mode.

Many economists warn that an economic downturn is looming. Economist Johns Hopkins predicts ‘a whopper’ of a recession next year. He said, “We will have a recession because we’ve had five months of zero M2 growth, money supply growth, and the Fed isn’t even looking at it.” In addition, nearly 46% of CFOs surveyed by Deloitte expect the North American economy to be in a recession by next year, while 39% expect stagflation.

Given the pessimistic outlook, it could be wise to avoid crypto-focused stocks Coinbase Global, Inc. (COIN) and Riot Blockchain, Inc. (RIOT), as they are not well-positioned to survive the market uncertainty.

Coinbase Global, Inc. (COIN)

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.

Analysts expect COIN’s EPS to remain negative for fiscal 2022. Its revenue for the quarter ending September 30, 2022, is expected to decline 49.7% year-over-year to $659.52 million. The stock has lost 76.2% over the past nine months and 75.1% year-to-date to close the last trading session at $62.78.

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 and a D for Quality. It is ranked #153 out of 155 stocks in the F-rated Software – Application industry. Click here to see COIN’s rating for Momentum.

Riot Blockchain, Inc. (RIOT)

RIOT is involved in cryptocurrency mining and the overall blockchain system through various investments. It operates through Bitcoin Mining, Data Center Hosting, and Electrical Products and Engineering segments.

For the fiscal second quarter that ended June 30, 2022, RIOT’s total cost and expenses increased 1,012.1 year-over-year to $438.96 million. The company’s operating loss widened 7,045.9% from the year-ago period to $366.01 million. Also, its net loss came in at $366.33 million, compared to a net income of $19.34 million in the year-ago period.

Its adjusted EBITDA loss came in at $65.17 million compared to an adjusted EBITDA of $2.38 million a year ago. In addition, its adjusted loss per share came in at $0.50, compared to an adjusted EPS of $0.03 in the year-ago period.

For the quarter ending September 30, 2022, RIOT’s revenue is expected to decline 1.7% year-over-year to $63.72 million. Its EPS for the current quarter is expected to be negative. It has failed to surpass the consensus EPS estimates in three of the trailing four quarters. The stock has declined 77.3% over the past nine months and 71.3% year-to-date to close the last trading session at $6.40.

RIOT’s POWR Ratings reflect this bleak outlook. It has an overall F rating, equating to a Strong Sell in our proprietary rating system.

It has an F for Stability and Quality and a D for Value and Sentiment. Within the D-rated Technology – Services industry, it is ranked #80 out of 82 stocks. To see the other ratings of RIOT for Growth and Momentum, click here.

COIN shares were trading at $64.06 per share on Wednesday morning, up $1.28 (+2.04%). Year-to-date, COIN has declined -74.62%, versus a -16.42% 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
RIOTGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com

Is This REALLY a Bull Market?

The S&P 500 (SPY) keeps making record highs...but does that mean that market conditions are truly bullish? 44 year investment veteran shines a light on how hollow recent gains are as they are only accruing to a handful of stocks with most investors searching high and low for stock market gains. Read on for more...

Unveiling Adobe (ADBE) Q2 Earnings: What Lies Ahead for Investors?

Software giant Adobe Inc. (ADBE) has released its second-quarter earnings, revealing double-digit growth in both revenue and profits. Yet, concerns arise around the complexities of navigating growth in the face of advancing AI technologies. Let’s analyze ADBE’s recent performance and assess key fundamentals to uncover what lies ahead for investors…

3 AI Stocks to Invest in for the Next Technological Revolution

The AI market is experiencing a significant growth trajectory, driven by widespread application across various industries. Hence, it could be wise to invest in top AI stocks, Alphabet (GOOGL), Meta Platforms (META), and Alibaba Group Holding (BABA) for the next technological revolution. Read more...

Analyzing Broadcom’s (AVGO) Q2 Earnings: Worth Investing?

Driven by a surge in demand for its AI products, Broadcom (AVGO) reported robust earnings in its latest quarterly results, exceeding expectations on both top and bottom lines. However, is the stock’s recent announcement of a 10-for-1 stock split worth investing in? Keep reading to find out…

Bullish or Bearish Stock Set Up?

The S&P 500 (SPY) record highs sounds pretty darn bullish on the surface. Yet as we dig below the surface there are some curious signals that point more Risk Off. This is especially true as we come into the next Fed meeting after a round of data that points to inflation still being too high...only further delaying the first rate cut. What does this all mean for stocks from here? Steve Reitmeister offers his latest views on the market outlook along with a preview of his top picks to stay on step ahead of the market. Read on for more...

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