Reasonable Price-to-Earnings Ratio
Strong Gross Profit Margin
High Net Profit Margin
Strong Return on Equity
Low Debt Levels
Strong Liquidity Position
Strong Revenue Growth
Diverse Revenue Streams
Market Leadership
Regulatory Tailwinds
Expansion into New Markets
Innovative Product Development
High Price-to-Sales Ratio
Elevated Price-to-Cash-Flow Ratio
Overall, Coinbase demonstrates strong business quality through significant revenue growth and market leadership, while its future prospects are bolstered by favorable regulatory shifts and innovative product strategies. The company is well-positioned to capitalize on the expanding crypto market.
Analysis Date: February 13, 2025
Last Updated: March 11, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$394.80
Current Market Price: $162.07
IV/P Ratio: 2.44x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
59.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for COIN
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (15.66)
P/B ratio ≤ 1.5 (3.93)
Current ratio ≥ 2.0 (2.28x)
Long-term debt < Net current assets (0.01x)
Margin of safety (59.0%)
COIN does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
COIN's net profit margin of 41.40% reflects effective cost control and strong profitability, indicating high earnings relative to revenue.
A return on equity (ROE) of 29.10% is impressive, showcasing the company's ability to generate high returns on shareholders' equity.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
29.10%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
5.73%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
86.01%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
41.40%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
With a debt-to-equity ratio of 0.03 and debt-to-assets ratio of 0.01, COIN demonstrates a strong financial position with minimal reliance on debt.
The current ratio of 2.28 and quick ratio of 2.28 indicate that COIN has a robust liquidity position, capable of covering short-term obligations.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.03x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
2.28x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
Coinbase reported a total revenue of $6.6 billion in 2024, more than doubling from the previous year, and achieving an adjusted EBITDA of $3.3 billion. This demonstrates the company's ability to grow its financial performance significantly even in a volatile market.
The increase in subscription services revenue by 64% year-over-year to $2.3 billion showcases Coinbase's ability to diversify its offerings beyond trading, indicating a robust business model.
Coinbase achieved all-time high market share in both US spot and global derivatives trading, reflecting strong competitive positioning and trust among users.
The shift in the regulatory environment towards a more pro-crypto stance in the US is expected to facilitate broader market adoption and create new opportunities for Coinbase, as emphasized by CEO Brian Armstrong.
Coinbase's strategy to replicate a successful playbook in new high-growth markets and their goal to make USDC the number one dollar stablecoin indicate strong growth potential moving forward.
The focus on developing new products such as derivatives trading and stablecoin payments, along with the emphasis on CDP (Coinbase Developer Platform) to facilitate broader crypto utility, positions Coinbase well for future growth.