QS Research · Michael Burry's Scion Capital analyst template · 2006
Coinbase Global, Inc. (COIN)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case -21% · downside -28% · upside +33%
The market is capitalizing a return to peak: at $134.76, COIN trades at about 51x the six-year average net income to common of $753.9M and 2.78x book, while TTM net income to common is -$701.6M and TTM EBIT is only $200.5M. Normalized earnings support a base around $106 (-21%), with downside to $97 (-28%) if crypto winter repeats and upside to $179 (+33%) only if peak earnings return. The mix shift to subscription/services and stablecoins is real, but it does not meet the long rule, and the overvaluation is not extreme enough for a short given $1.41B TTM operating cash flow and $2.04B of buybacks. This is a watch, not an actionable long or short.
Key numbers
- Share price: $134.76
- Market cap: $38.81B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $5.63B
- Price / book: 2.78x
The 15 boxes
- ✓ 1. Long-form business notes
Coinbase monetizes a crypto trading platform two ways: transaction fees on consumer (Simple and Advanced) and institutional/Coinbase Prime trading, and subscription-and-services products — stablecoin economics under the Circle/USDC agreement, staking commissions, custody fees, interest on customer custodial funds, Coinbase One and the developer platform. Revenue is violently cyclical: $7.84B in FY2021, $3.19B in FY2022 (a -59% fall), $3.11B in FY2023, $6.56B in FY2024 and $7.18B in FY2025, with operating income swinging from $3.08B to -$2.71B to $1.44B across the same years, so the cost base does not flex proportionally. Between the FY2021 and FY2025 10-Ks the product set widened from spot crypto plus staking/Cloud into an 'Everything Exchange' (stocks, futures, prediction markets, Deribit options) with Base chain sequencer fees, while the balance sheet grew to $14.79B of total equity and $11.29B of cash at FY2025 and the company bought back $790.2M of stock for the first time in the six years shown.
- ✓ 2. Competitive advantage
The source set shows a cyclical franchise, not a durable moat: revenue went from $7.84B in FY2021 to $3.19B in FY2022 and operating income from $3.08B to -$2.71B, while FY2025 revenue was $7.18B with $1.44B operating income. Management claims differentiation through ease of use, a trusted/compliant brand and onchain-native products, but competition is broad and the sources give no market-share, retention or pricing data. FY2025 returns weakened versus FY2024: net income to common fell to $1.26B from $2.58B and operating cash flow to $2.43B from $3.10B.
- ✓ 3. 10-Q takeaways
Q3 2026 revenue fell to $1.2B from $1.8B as transaction revenue dropped 44% to $590.2M and subscription/services fell 20% to $570.2M; nine-month net revenue was $3.7B vs $5.1B. Reported Q3 net income of $718.7M is not clean operating earnings: it includes a $715.0M net gain on crypto held for investment, while Adjusted EBITDA was $332.9M and the nine-month GAAP result was a $34.9M net loss against $843.9M Adjusted EBITDA. Cash and marketable investments were $8.8B at September 30, 2026; the company used $1.2B to buy back about 7.1M Class A shares in the nine months and had about $2.0B left on a $4.0B authorization. FY2026 outlook in the 10-Q is only qualitative: tech/G&A/S&M expense excluding intangible amortization slightly lower than FY2025; no numeric Q4 or FY2026 revenue/EPS guidance appears in the supplied 10-Q or earnings release excerpt.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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