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Coinbase: Overvalued or Underappreciated

Apr 6, 2021 · 7 min read

By Kevin Kelly, CFA

We’re just a week away from Coinbase’s highly anticipated direct listing and there’s no shortage of speculation surrounding its public debut. Rumblings in recent weeks have pegged the company’s market cap anywhere between $68-90 billion, though alternative trading venues like FTX currently imply a ~$120 billion market cap for the crypto giant, which will trade under the ticker COIN. Notably, the high end of that range would put Coinbase in the top 70 largest publicly traded companies in the U.S., wedged between industrial conglomerate General Electric ($118B) and asset management giant BlackRock ($121B).

Much of the attention has fallen on Coinbase’s expected valuation, specifically in relation to its 2020 financials, which showed top line revenue of ~$1.28 billion last year, a nearly 140% increase from 2019. Assuming a $68 billion market cap, Coinbase would start trading at ~53x trailing 12M revenue; at $120 billion, that multiple is closer to 94x T12M sales. For p

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