Coinbase COIN
What does Coinbase do?
Coinbase operates one of the largest trading platforms for cryptocurrencies and offers retail customers an account through which digital assets can be bought, sold, stored and transferred. For institutional clients, the company provides a brokerage platform with access to aggregated liquidity, as well as custody and trading services. Developers receive tools and infrastructure to build blockchain-based applications.
Coinbase generates the majority of its revenue from transaction fees on trading. In addition, there is subscription and services revenue, for example from staking, custody, interest income on customer balances and income related to stablecoins. Competitively, the company faces both other crypto exchanges and traditional brokers building crypto offerings. Coinbase stands out through its regulation-focused approach, its brand and its access for institutions, but remains heavily dependent on the crypto market cycle.
Score profile
Rank vs. Financial Data & Stock Exchanges (12 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, Coinbase ranks below average in the group Financial Data & Stock Exchanges (2.1/10). On growth, the company ranks in the middle in the group Financial Data & Stock Exchanges (5.0/10). On valuation (higher = cheaper), the stock ranks in the middle in the group Financial Data & Stock Exchanges (5.0/10). On financial strength, Coinbase ranks in the bottom fifth in the group Financial Data & Stock Exchanges (0.4/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 54.7x | 23.4x | better than 4 % |
| PEG ratio | 0.6x | 1.9x | better than 96 % |
| EV/EBITDA | 125.6x | 18.2x | better than 5 % |
| Price/sales | 6.4x | 7.8x | better than 71 % |
| Price/book | 2.5x | 5.3x | better than 95 % |
| Revenue growth | -34.2% | 12.3% | better than 4 % |
| Earnings growth | 67.4% | 18.8% | better than 96 % |
| Gross margin | 85.3% | 77.3% | better than 71 % |
| Operating margin | -1.4% | 43.9% | better than 4 % |
| Net margin | -12.9% | 29.3% | better than 4 % |
| Return on equity | -4.7% | 17.6% | better than 4 % |
| Debt/equity | 49.4% | 74.6% | better than 71 % |
| Current ratio | 2.4x | 1.0x | better than 96 % |
| Free cash flow yield | 10.5% | 3.1% | better than 96 % |
| Dividend yield | 0.0% | 1.1% | – |
| Payout ratio | 0.0% | 27.8% | – |
| Beta | 3.35 | 0.93 | – |
Valuation: what is Coinbase worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give Coinbase a model range of 56.45 USD to 276.37 USD per share.
34 analysts, average rating “Buy”, average price target 196.56 USD (+48.8%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- Trading volume on the platform, which depends heavily on price and volatility phases in the crypto market, determines transaction revenue.
- Growing services revenue from staking, custody and stablecoins can reduce dependence on the pure trading business.
- The number of active customers and the assets held on the platform influence revenue and customer loyalty.
Risks
- Regulatory changes or proceedings in key markets can significantly affect the business model, product offering and costs.
- Sharp price declines and low volatility in the crypto market weigh on trading volume and earnings, while high fixed costs remain.
- Security incidents, hacking attacks or operational disruptions can damage trust, customer assets and reputation.
What to look for with Coinbase
The ratio of trading revenue to services and subscription revenue shows how strongly earnings depend on volatile crypto trading or are supported by more stable sources.