Coinbase Global, Inc.COINNASDAQ

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DCF Valuation

⚠️Model Warnings

•Revenue projections show 47% decline from peak. Analyst estimates may reflect secular headwinds or transition period.

DCF Valuation Summary

Strong Sell

Fair Value: $69.72 per share(market-calibrated)

-66.6%

Upside to Fair Value

Current

$208.93

Pure Model

$23.32

Fair Value

$69.72

Bull Case

$23.42

Bear Case

$27.17

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

Unreachable

Calibrated Growth

75/25 blend

Market price implies assumptions beyond model range. Fair value blends 75% model / 25% market price.

What's Driving This Ratingfor COIN

✓

CapEx already efficient

CapEx at 0.24% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 2.89% — below the sector mature average of 28.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $471M (19.77% margin).

⚠

Analyst growth decelerates sharply

Revenue growth drops from -0.19% in Year 1 to -38.93% by Year 5 (per analyst consensus). That's below the 2.50% terminal rate, so growth re-accelerates in Years 6-10 — a generous assumption. This growth deceleration is a key reason the model may undervalue the stock if growth re-accelerates.

⚠

Market price exceeds model's maximum

Even with the most optimistic terminal growth the model allows, it can't reach $208.93. The market is pricing in factors beyond the DCF framework — possibly optionality, brand premium, or expectations of margin/growth inflection not yet in analyst estimates.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 79.86% indicates efficient cash generation. FCF reaches $411M by Year 10 (17.29% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)3.71

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)21.19%

Cost of Debt

Pre-tax Cost of Debt0.94%

Tax Rate17.20%

After-tax Cost of Debt0.78%

Equity Weight (E/V)87.40%

Debt Weight (D/V)12.60%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (87.40% × 21.19%) + (12.60% × 0.78%)

= 18.62%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$7.2B	$10.0B	$5.3B	$2.9B	$2.4B
EBIT	$207M	$289M	$154M	$342M	$471M
Tax	$36M	$50M	$26M	$59M	$81M
NOPAT	$172M	$240M	$128M	$283M	$390M
+ Depreciation	$134M	$188M	$100M	$54M	$45M
- Capex	$17M	$24M	$13M	$7M	$6M
- Δ NWC	-$4M	$438M	-$1.0B	-$244M	$17M
Free Cash Flow	$293M	-$34M	$1.2B	$574M	$411M
Discount Factor	0.843	0.599	0.426	0.303	0.181
Present Value	$247M	-$21M	$519M	$174M	$75M

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$411M

Terminal Growth Rate2.50%

WACC18.62%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$2.6B

PV of Terminal Value$474M

Exit Multiple Method

Year 10 EBITDA$515M

Exit Multiple (EV/EBITDA)12.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$6.2B

PV of Terminal Value$1.1B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$1.8B

PV of Terminal Value$474M

Enterprise Value$2.3B

(-) Net Debt-$3.5B

Equity Value$5.7B

Shares Outstanding260M

Price per Share$22.08

Exit Multiple Method

PV of Projected FCFs$1.8B

PV of Terminal Value$1.1B

Enterprise Value$2.9B

(-) Net Debt-$3.5B

Equity Value$6.4B

Shares Outstanding260M

Price per Share$24.56

Pure Model Fair Value

$23.32

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
16.62%	$24.61	$24.66	$24.70	$24.75	$24.81
17.62%	$23.90	$23.94	$23.98	$24.02	$24.06
18.62%	$23.26	$23.29	$23.32	$23.35	$23.39
19.62%	$22.67	$22.70	$22.72	$22.75	$22.78
20.62%	$22.13	$22.15	$22.18	$22.20	$22.22

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$27.17

-87.0% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 3.00

Base Case

$23.32

-88.8% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: 3.71

Bull Case

$23.42

-88.8% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 3.15

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Financial Services Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth-0.19%

Year 3 Revenue Growth17.38%

Year 5 Revenue Growth-38.93%

Year 7 Revenue Growth-22.36%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin2.89%

Terminal EBIT Margin28.00%

Tax Rate17.20%

Historical Capex / Rev0.24%

NWC / Revenue29.54%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 12x EV/EBITDA (Financial Services sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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