Analysis of Bernstein's Report on Coinbase Global Inc. (COIN)

Key Facts and Data Points

• Price Target: Bernstein set a price target of $310 for Coinbase stock, representing a potential 69% upside from its current price of $188.96.
• EPS Growth Projection: Bernstein expects Coinbase's EPS to grow at a 38% CAGR through 2026, significantly outpacing Wall Street consensus estimates.
  • Bernstein is 61% ahead of consensus on 2026 EPS estimates.
• Revenue Growth:
  • Trading revenues expected to rise at a 34% CAGR.
  • Non-trading revenues (e.g., staking, stablecoin issuance, institutional custody) projected to grow at a 31% CAGR between 2024 and 2026.
• Market Share: Coinbase holds over 66% U.S. market share, positioning it as the leading platform for crypto trading in the U.S.
• Regulatory Impact:
  • The Trump administration's pro-crypto policies, including a stablecoin bill and digital asset market structure legislation, are expected to drive growth.
  • Bernstein highlights the "lifting of the regulatory dark cloud" over Coinbase, creating a new growth opportunity.

Market Trends and Business Insights

• Regulatory Clarity: The U.S. government's crypto-friendly stance is seen as a key driver for Coinbase's growth, with offshore crypto volumes expected to shift back to U.S. markets.
• Competitive Dynamics:
  • Despite competition from fintech companies like Robinhood and traditional brokerages, Coinbase's "compliance-first approach" and safety track record provide a durable competitive advantage.
• Non-Trading Revenues: The diversification into non-trading revenue streams is expected to reduce reliance on volatile crypto trading volumes and drive long-term growth.

Strategic Considerations

• Valuation:
  • Bernstein values Coinbase at a 21x price-to-earnings multiple based on 2026 earnings, aligning with fintech and broker-dealer peers.
  • The firm notes that Coinbase's PEG ratio is materially lower than its peers, suggesting it trades at a discount relative to its growth potential.

Long-Term Effects and Industry Implications

• Institutional Adoption: The report highlights the growing adoption of digital assets by institutional investors as a key driver of Coinbase's future growth.
• Global Expansion: Bernstein expects Coinbase to capitalize on the reshoring of global crypto markets to the U.S., further solidifying its leadership position.

Stock Performance and Sentiment

• Recent Performance: Coinbase stock has declined approximately 24% over the past year but has recently rallied amid improving sentiment around digital assets.
• Sentiment Drivers: The report attributes the rally to institutional adoption and regulatory tailwinds, with the lifting of regulatory uncertainty being a key factor.

Conclusion

Bernstein's report underscores Coinbase's strong competitive position, robust growth prospects, and undervaluation relative to its peers. The firm's focus on non-trading revenues and its ability to capitalize on U.S. market dominance are seen as key drivers of long-term growth.