Coinbase Global Stock Fair Value Calculation – Mizuho Warns of 30% Coinbase Revenue Loss Due to SEC Alt-Coin Regulatory Clampdown
June 26, 2023
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Coinbase Global ($NASDAQ:COIN) is a digital currency exchange platform that allows users to buy, sell, store, and trade digital assets. Recently, financial services giant Mizuho warned investors that Coinbase’s revenue could be reduced by as much as 30 percent due to an impending regulatory clampdown on alternative coins (alt-coins) by the US Securities and Exchange Commission (SEC). Mizuho stated that Coinbase’s current reliance on alt coins for revenue means that any SEC regulatory efforts could have a serious impact on its bottom line. Therefore, any regulations from the SEC that target these alternative coins could cause major losses for the company. The potential for any regulatory tightening has alarmed investors, who worry that an SEC clampdown on alt coins could significantly reduce Coinbase’s profitability.
However, despite the risks, Coinbase remains optimistic about the future of digital currencies and has committed to adhering to all applicable laws and regulations. The company has also stated that it will continue to focus on its core mission of providing a secure, reliable and easy to use platform for users to buy, sell, store and trade digital assets.
Earnings
Mizuho, a Japanese financial institution, has warned of a potential 30% dip in total revenue for COINBASE GLOBAL due to a recent clampdown on alt-coins by the SEC. According to its earning report of FY2023 Q1 ending March 31 2021, COINBASE GLOBAL earned 1801.11M USD in total revenue and 771.46M USD in net income. This represented a 54.4% increase in total revenue as well as a 279.6% decrease in net income compared to the previous year.
In the past three years, COINBASE GLOBAL’s total revenue has decreased from 1801.11M USD to 772.53M USD. Should the SEC’s regulations prove to be successful, Mizuho predicts that this could lead to a 30% loss in total revenue for COINBASE GLOBAL.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Coinbase Global. More…
| Total Revenues | Net Income | Net Margin |
| 2.8k | -2.27k | -75.5% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Coinbase Global. More…
| Operations | Investing | Financing |
| -1.03k | 1.69 | -4.65k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Coinbase Global. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 139.3k | 133.63k | 24.2 |
Key Ratios Snapshot
Some of the financial key ratios for Coinbase Global are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 81.6% | – | -90.4% |
| FCF Margin | ROE | ROA |
| -39.3% | -28.4% | -1.1% |
Analysis – Coinbase Global Stock Fair Value Calculation
At GoodWhale, we’ve conducted a valuation of COINBASE GLOBAL, looking at the fundamentals of the company. Our proprietary Valuation Line has calculated its fair value to be around $69.6. Right now, COINBASE GLOBAL shares are traded at $51.6, representing a 25.9% discount to its fair value. This suggests that the stock is currently undervalued. More…
Peers
The competition between Coinbase Global Inc and its competitors is fierce. Each company is trying to get a larger share of the market and to be the leading digital currency exchange. Coinbase Global Inc is the largest digital currency exchange in the world and it has a lot of experience. However, its competitors are also very experienced and they are all trying to get a larger share of the market.
– Riot Blockchain Inc ($NASDAQ:RIOT)
Riot Blockchain Inc. is a cryptocurrency mining company that focuses on Bitcoin mining. The company has a market capitalization of $981.09 million and a return on equity of -17.02%. Riot Blockchain Inc. was founded in 2000 and is headquartered in Castle Rock, Colorado.
– Robinhood Markets Inc ($NASDAQ:HOOD)
Robinhood Markets Inc is a financial services company that offers a commission-free trading platform for stocks, options, and cryptocurrency. The company has a market cap of 9.19B as of 2022 and a Return on Equity of -33.37%. Robinhood was founded in 2013 and is headquartered in Menlo Park, California.
– MicroStrategy Inc ($NASDAQ:MSTR)
MicroStrategy Inc is a publicly traded business intelligence company. The company has a market cap of 2.66B as of 2022 and a ROE of -77.69%. MicroStrategy offers a comprehensive suite of products that enable organizations to analyze internal and external data to make better informed decisions. The company’s products are used by organizations of all sizes, in a variety of industries, including banking, healthcare, insurance, retail, telecommunications, and many others.
Summary
Coinbase Global Inc. (COIN) is a leading digital currency exchange and cryptocurrency-focused company listed on the Nasdaq. Recently, regulatory concerns have weighed on the stock price as the SEC has clamped down on alternative coins, which could put around 30% of Coinbase’s revenue at risk, according to Mizuho analysts. Investors should closely monitor the situation, as any further enforcement from the SEC could cause additional downward pressure on COIN’s stock price. Additionally, the company’s expansion plans and product offerings should be monitored as they continue to strive for greater market share.
