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Prior to the broader market selloff over the last week, Robinhood Markets andCoinbase Global were two popular growth stocks that had started to soar this year. Both launched highly anticipated IPO's in 2021, as security exchange operators that were ahead of the curve in regards to cryptocurrency trading.
Starting to fulfil their expansion expectations, Robinhood's stock had hit a 52-week high of $66 a share earlier in the month but is down more than 20% from this peak. Meanwhile, Coinbase shares had climbed to over $300 a few weeks ago but have fallen 30% from what was nearly a two-month high.
That said, in the last two years, HOOD and COIN have impressively outperformed the broader indexes with gains of over +400% and +200%, respectively.
Positive EPS Revisions
Although Robinhood and Coinbase stock have been very susceptible to recent market volatility, the main catalyst to their strong price performances beforehand is still apparent. This is the trend of positive earnings estimate revisions, which suggests their stocks could bounce back when markets stabilize.
Fiscal 2025 and FY26 EPS estimates for Robinhood have continued to trend higher over the last quarter. Plus, FY25 EPS estimates have spiked 28% in the last 30 days from $1.18 to $1.51. More intriguing, over the last month, FY26 EPS estimates have jumped 15% from $1.47 to $1.70.
As for Coinbase, it's noteworthy that FY25 EPS estimates have soared 110% in the last 30 days from $3.48 to $7.32. This comes as Coinbase crushed its Q4 EPS expectations for FY24 by 74.74% earlier in the month. Bolstering Coinbase's strengthening outlook is that FY26 EPS estimates have skyrocketed nearly 200% over the last four weeks, from $2.97 to $8.72.
Reasonable P/E Valuations
Making the trend of positive EPS revisions more reassuring is that HOOD and COIN are starting to trade at reasonable P/E valuations. Reassuringly, COIN now trades at a 29.4X forward earnings multiple compared to a one-year high of 255.3X and a median of 54.2X.
Furthermore, HOOD trades at 32.4X forward earnings which is well below its own one-year high of 89.3X and a slight discount to the median of 41.8X.
Conclusion & Final Thoughts
Taking advantage of their sales growth, the increased probability of Robinhood and Coinbase is hard to ignore, even amid recent market volatility. Both have triggered a Zacks Rank #1 (Strong Buy) rating thanks to the trend of positive earnings estimate revisions.
Furthermore, COIN and HOOD are starting to look like buy the dip targets given their more reasonable valuations. This also alludes to the notion that the recent pullback in these popular stocks was a healthy correction.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Robinhood Markets and Coinbase Global
For Immediate Release
Chicago, IL – February 28, 2025– Today, Zacks Investment Ideas feature highlights Robinhood Markets (HOOD - Free Report) and Coinbase Global (COIN - Free Report) .
Will Robinhood (HOOD - Free Report) or Coinbase (COIN - Free Report) Bounce Back?
Prior to the broader market selloff over the last week, Robinhood Markets andCoinbase Global were two popular growth stocks that had started to soar this year. Both launched highly anticipated IPO's in 2021, as security exchange operators that were ahead of the curve in regards to cryptocurrency trading.
Starting to fulfil their expansion expectations, Robinhood's stock had hit a 52-week high of $66 a share earlier in the month but is down more than 20% from this peak. Meanwhile, Coinbase shares had climbed to over $300 a few weeks ago but have fallen 30% from what was nearly a two-month high.
That said, in the last two years, HOOD and COIN have impressively outperformed the broader indexes with gains of over +400% and +200%, respectively.
Positive EPS Revisions
Although Robinhood and Coinbase stock have been very susceptible to recent market volatility, the main catalyst to their strong price performances beforehand is still apparent. This is the trend of positive earnings estimate revisions, which suggests their stocks could bounce back when markets stabilize.
Fiscal 2025 and FY26 EPS estimates for Robinhood have continued to trend higher over the last quarter. Plus, FY25 EPS estimates have spiked 28% in the last 30 days from $1.18 to $1.51. More intriguing, over the last month, FY26 EPS estimates have jumped 15% from $1.47 to $1.70.
As for Coinbase, it's noteworthy that FY25 EPS estimates have soared 110% in the last 30 days from $3.48 to $7.32. This comes as Coinbase crushed its Q4 EPS expectations for FY24 by 74.74% earlier in the month. Bolstering Coinbase's strengthening outlook is that FY26 EPS estimates have skyrocketed nearly 200% over the last four weeks, from $2.97 to $8.72.
Reasonable P/E Valuations
Making the trend of positive EPS revisions more reassuring is that HOOD and COIN are starting to trade at reasonable P/E valuations. Reassuringly, COIN now trades at a 29.4X forward earnings multiple compared to a one-year high of 255.3X and a median of 54.2X.
Furthermore, HOOD trades at 32.4X forward earnings which is well below its own one-year high of 89.3X and a slight discount to the median of 41.8X.
Conclusion & Final Thoughts
Taking advantage of their sales growth, the increased probability of Robinhood and Coinbase is hard to ignore, even amid recent market volatility. Both have triggered a Zacks Rank #1 (Strong Buy) rating thanks to the trend of positive earnings estimate revisions.
Furthermore, COIN and HOOD are starting to look like buy the dip targets given their more reasonable valuations. This also alludes to the notion that the recent pullback in these popular stocks was a healthy correction.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.