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After Earnings, Is Coinbase Stock a Buy, a Sell, or Fairly Valued?

With roaring increases in revenue and substantial growth in the crypto market, here’s what we thought of Coinbase stock.

Michael Miller, CFA 27 February, 2025 | 12:01PM
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Sur cette photo d'illustration, le logo de Coinbase est affiché sur un smartphone.

Coinbase Global COIN released its fourth-quarter earnings report on Feb. 13. Here’s Morningstar’s take on Coinbase’s earnings and stock.

Key Morningstar Metrics for Coinbase Global


What We Thought of Coinbase Global’s Earnings

As shown by impressive trading revenue results in the fourth quarter, Coinbase’s USDC business was a major success story in 2024. Recovering from its Silicon Valley Bank lows, the stable coin’s market capitalization has set new highs, taking market share from its closest rival, Tether.

The bottom line: We are increasing our fair value estimate to $170 per share from $150. Despite the increase, we still see the stock as overvalued, as we think cryptocurrency’s strong performance is causing the market to extrapolate too much growth.

  • Roughly half of the increase comes from higher revenue projections for Coinbase’s USDC revenue. USDC is a cryptocurrency pegged to the US dollar and backed by reserves that clients give to Coinbase and its partner, Circle, in exchange for USDC.
  • Coinbase and Circle generate interest income on these reserves and expectations for fewer interest rate cuts directly benefit the program. Additionally, USDC has seen a sudden increase in adoption, with its market capitalization more than doubling since the start of 2024.

Key stats: Despite rapid growth in Coinbase’s interest income the firm is still heavily exposed to cryptocurrency markets. More than 60% of Coinbase’s revenue in 2024 was transactional.

  • Additionally, another 13.5% of Coinbase’s revenue came from staking and custody services, both of which are directly tied to cryptocurrency prices.
  • This heavy exposure makes Coinbase’s results inherently volatile as cryptocurrency markets are prone to wild swings. We generally caution investors against extrapolating too much of Coinbase’s recent strength and emphasize our Very High Uncertainty Rating.

Coinbase Global Stock Price

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Fair Value Estimate for Coinbase

With its 1-star rating, we believe Coinbase’s stock is significantly overvalued compared with our long-term fair value estimate of $170 per share. Our fair value estimate depends heavily on trading volume assumptions, the rate we expect Coinbase’s trading fees to compress over time, and interest income projections from Coinbase’s partnership with Circle for the stablecoin USDC.

Coinbase’s largest source of revenue is trading fees, which are assessed as a percentage of the amount being traded on its platform. This ties its long-term revenue growth to the size of the overall cryptocurrency asset class and its market share. Cryptocurrency is still a speculative asset class, and the number of available cryptocurrencies to trade, the space’s eventual market capitalizations, and even its continued existence are still major unknowns.

Read more about Coinbase Global’s fair value estimate.

Coinbase Global Stock vs. Morningstar Fair Value Estimate

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Economic Moat Rating

In our view, Coinbase has no economic moat despite being the leading cryptocurrency exchange in the United States. Coinbase has carved out a strong place by positioning itself as a reliable and compliant place to buy and sell cryptocurrency in an industry filled with risk, weak security practices, and spotty regulatory enforcement. This has let it charge fees higher than many peers while building a large pool of liquidity on its platform. The company’s reputational advantages have only grown in recent years, following the collapse of one of its largest rivals, FTX, due to financial fraud. While we expect fee compression in the long term, recent events will likely allow Coinbase to continue to charge a premium in the immediate future.

Read more about Coinbase Global’s economic moat.

Financial Strength

Coinbase is in a strong financial position, though it is unprofitable and will likely remain so until cryptocurrency market conditions improve. The company ended June 2024 with over $7.2 billion in cash and more than $2.2 billion in cryptocurrency, including over $1 billion in USDC, a cryptocurrency pegged to the US dollar. These assets are held against $4.2 billion in debt.

The decision to keep strong cash reserves makes sense, given how volatile the company’s revenue generation can be, and it gives Coinbase room to maneuver during prolonged weak cryptocurrency markets. We think staying relatively unleveraged will be an important step in keeping the company financially secure in the long term.

Read more about Coinbase Global’s financial strength.

Risk and Uncertainty

We give Coinbase a Very High Uncertainty Rating. The firm gets over half its net revenue from trading fees at its exchange business. Fees are charged as a percentage of the underlying assets, creating direct exposure to cryptocurrency prices. In 2022, Coinbase’s revenue fell more than 59% from the prior year as cryptocurrency prices collapsed. This is still a highly speculative area, and the number of active traders on Coinbase’s platform can vary sharply based on market performance. At the moment, this exposure is to the firm’s advantage, but the durability of the current market recovery is a major point of uncertainty. The company also has interest-rate exposure through its participation in USDC, which generates significant interest income.

There is also a material amount of environmental, social, and governance risk. Coinbase operates with a broad scope. It acts as an asset custodian, broker, and exchange in the cryptocurrency economy. This creates significant potential for conflicts of interest, which could lead to reputational damage or regulatory action. There are also legal and regulatory gray areas in Coinbase’s business. It is possible that some of the assets that trade on its platform could be ruled as unregistered securities forcing the firm to delist them.

Read more about Coinbase Global’s risk and uncertainty.

COIN Bulls Say

  • Coinbase has established itself as the leading US cryptocurrency exchange, with a strong reputation for security in an industry filled with risk.
  • Cryptocurrency prices increased sharply at the end of 2023, leading to higher trading volume and revenue for Coinbase.
  • There is a worldwide cryptocurrency market. Regulatory approval from international regulators will allow Coinbase to expand its operations and increase its footprint globally.

COIN Bears Say

  • Cryptocurrency markets have historically been deeply cyclical, with long periods of low prices and depressed trading volume. This adds considerable volatility to Coinbase’s revenue flow.
  • The regulatory landscape and long-term viability for cryptocurrency remain unclear, with regulators becoming more aggressive after the high-profile fraud and failure of FTX.
  • The SEC has accused Coinbase of acting as an unregistered securities exchange, creating major regulatory and legal uncertainty.

This article was compiled by Aman Dagra.


The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.

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About Author

Michael Miller, CFA  is an equity analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc.

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