Coinbase Global Inc (NASDAQ: COIN) has nearly doubled over the past five months already but an Oppenheimer analyst remains convinced that it still has a lot more room to the upside.
Own Lau maintained his “buy” rating on the crypto company following its quarterly earnings and raised his price target to $388, which indicates potential for another 40% upside from current levels.
More importantly, the investment firm sees a possibility of Coinbase being included in the S&P 500 index this year.
What criteria has to be met for inclusion in the S&P 500
Companies have to meet certain criteria in order to be included in the S&P 500 index.
This includes having a headquarters in the United States and a market cap of more than $20 billion.
Additionally, a business eyeing inclusion in the S&P 500 index must have positive earnings in the latest reported quarter.
The sum of its earnings over the previous four quarters must be positive as well.
Oppenheimer expects Coinbase stock to soon be included in the S&P 500 index because it meets the above-mentioned criteria.
Investors should note, however, that the final decision on inclusion is made by the S&P Index Committee, which considers various factors beyond just meeting the basic criteria.
Coinbase is winning share against Robinhood
Oppenheimer recommends loading up on Coinbase stock also because it’s stealing market share from Robinhood in crypto spot trading.
In January, the Nasdaq-listed firm owned 67% of the crypto spot trading market versus 64% in November 2024.
Moreover, Owen Lau expects COIN shares to benefit as the Trump administration makes good on its promises of pro-crypto policies.
Coinbase is considering penetrating the prediction markets to diversify its business model and create additional streams of revenue as well.
That could also drive its share price up, according to the analyst.
However, Coinbase stock is not a suitable pick for those interested in setting up a new source of passive income as it does not pay a dividend.
Coinbase Q4 earnings highlights
Lau’s bullish note on Coinbase shares arrives only days after the crypto company reported strong results for its fiscal fourth quarter.
The post-election rally pushed Coinbase’s revenue up 130% on a year-over-year basis to $2.27 billion – a new high since 2021.
On an adjusted basis, the company earned $4.68 per share in its Q4 versus analysts at a much lower $1.81 a share.
In its letter to shareholders, Coinbase said last week:
Our goals in 2025 are to drive revenue, drive utility, and scale our foundations. Our ambition to drive revenue reflects our intention to grow trading market share in the markets where we operate.
Coinbase is reportedly considering resuming operations in India as well which could further boost its revenue moving forward.
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