Coinbase Global, Inc. COIN
Verdict: Sell. Fair value $202 against a price of $255 on 6 Jan 2026, 21% below the price.
In plain words
The case for: Narrow competitive moat provides durability. Market leadership enables pricing power. Industry tailwinds with growing market.
The case against: High industry disruption risk. Intense competitive pressure could compress margins. Net Income has swung wildly from a $3.62B profit in 2021 to a -$2.62B loss in 2022, and back to a....
Main risks
- Extreme Cyclicality: Financial performance is entirely dependent on volatile crypto asset prices and trading volumes, leading to massive swings from profit to loss (e.g., +$3.6B Net Income in 2021 to -$2.6B in 2022).
- Negative Incremental Returns on Capital: The 3-year ROIIC is estimated at -251%, indicating that capital invested since the 2021 peak has destroyed significant value as earnings collapsed from their highs.
- Poor Underlying Profitability (ROIC): The TTM Return on Invested Capital (ROIC) is exceptionally low at ~1.0%, suggesting the business struggles to generate adequate returns on its large capital base outside of peak bull market conditions.
- Net Income has swung wildly from a $3.62B profit in 2021 to a -$2.62B loss in 2022, and back to a...
- The OCF/Net Income ratio has been extremely volatile: 0.60 in 2022, 9.73 in 2023, and 0.99 in 2024....
- High industry disruption risk