Key Morningstar metrics for Coinbase Global

  • Fair Value Estimate: $160.00
  • Morningstar Rating: ★★★
  • Morningstar Economic Moat Rating: None
  • Morningstar Uncertainty Rating: Very High

What we thought of Coinbase Global’s earnings

Falling cryptocurrency prices led to weak results for Coinbase Global COIN, with net revenue falling 22.2% from last year to $1.71 billion. The company lost $2.49 per share, down from a gain of $4.68 last year. However, adjusted for cryptocurrency losses, it earned $0.66 per share.

Why it matters: While this was a weak earnings report, it was better than we had feared heading into the quarter. Because of its trading, staking, and custody businesses, Coinbase’s results tend to be correlated to cryptocurrency prices, which have declined significantly from their high.

  • Total transaction revenue fell 37% from last year to $928.7 million, despite the acquisition of Deribit in August, which bolstered the company’s position in derivative markets. That said, the fourth quarter of 2024 is a difficult comparison, and the sequential decrease in trading volume was smaller than anticipated.
  • The company’s stablecoin business remains a source of strength, with revenue increasing to $364.1 million from $225.9 million last year. While Coinbase is still exposed to cryptocurrency markets, the firm has successfully offset some of this exposure by growing its subscription and services revenue significantly in recent years.

The bottom line: We’ve reduced our fair value estimate for no-moat Coinbase. While this report was better than we had expected, it did not capture the full decline in cryptocurrency prices that has occurred.

  • In our view, the company has been punished too harshly in response to falling cryptocurrency prices. However, we highlight our Very High Uncertainty Rating. Cryptocurrency prices are inherently volatile, and we would like a wider margin of safety before getting too excited about the name.

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