After Earnings, Is Coinbase Stock a Buy, a Sell, or Fairly Valued?

Coinbase Global COIN released its fourth-quarter earnings report on Feb. 12. Here’s Morningstar’s take on Coinbase’s earnings and stock.

Key Morningstar Metrics for Coinbase Global

• Fair Value Estimate: $160.00
• Morningstar Rating: ★★★
• Morningstar Economic Moat Rating: None
• Morningstar Uncertainty Rating: Very High

What We Thought of Coinbase Global’s Q4 Earnings

While Coinbase’s fourth-quarter results were better than we feared, the firm still faces major headwinds from the collapse in cryptocurrency prices, which pressures its trading, staking, and custody businesses.

The bottom line: Returning to no-moat-rated Coinbase after earnings, we are decreasing our fair value estimate to $160 from $188. We see the shares as fairly valued after a significant rally in response to fourth-quarter earnings.

• The decrease in our fair value estimate primarily comes from a significant reduction in our near-term trading revenue projections. Cryptocurrency prices have seen a material correction in recent months, with total market capitalization falling more than 45% from the October peak.
• We expect trading revenue to decrease 20.6% in 2026 and to not fully recover until 2028. This decrease is only partially offset by high subscription and service revenue, which we expect to increase 14% next year, mostly thanks to the firm’s stable coin business.

Big picture: While Coinbase is still highly exposed to cryptocurrency prices, the firm has had significant success in reducing that exposure by growing its recurring revenue sources and diversifying its business.

• While we project another significant decrease in earnings, we expect the firm to remain profitable—a welcome change from the last crypto winter in 2022, when the firm suffered dramatic losses.

Fair Value Estimate for Coinbase Global

With its 3-star rating, we believe Coinbase stock is fairly valued compared with our long-term fair value estimate of $160 per share, which translates to 71.8 times our 2026 earnings projection and is heavily depressed by the recent collapse in cryptocurrency prices.

Our fair value estimate depends heavily on trading volume assumptions, the rate at which we expect Coinbase’s trading fees to compress over time, and interest income projections from Coinbase’s partnership with Circle for the stable coin USDC.

Read more about Coinbase Global’s fair value estimate.

Economic Moat Rating

In our view, Coinbase does not have an economic moat, despite being the leading cryptocurrency exchange in the United States. Coinbase has been able to carve out a strong place in the cryptocurrency exchange industry by intentionally positioning itself as a reliable and regulation-compliant place to buy and sell cryptocurrency in an industry filled with risk, weak security practices, and spotty regulatory enforcement. This has allowed the company to successfully charge fees higher than many of its peers while building a large pool of liquidity on its platform.

The company’s reputational advantages have only grown in recent years, following the collapse of one of its largest rivals, FTX, due to financial fraud. While we do expect fee compression to occur in the long term, recent events will likely allow Coinbase to continue to charge a premium in the immediate future. However, Coinbase is inherently reliant on the growth and success of bitcoin, ethereum, and other cryptocurrencies for generating returns on its invested capital. Cryptocurrency is still highly speculative, and the long-term success and viability is by no means guaranteed.

Read more about Coinbase Global’s economic moat.

Financial Strength

Coinbase is in a strong financial position, though it needs to be, as its heavy exposure to cryptocurrency prices and volatility can lead to sharp swings in revenue and profitability. These risks are partially mitigated by the firm’s solid balance sheet. The company ended December 2025 with more than $11.2 billion in cash and almost $2 billion in cryptocurrency investments. These assets are held against $7.2 billion in debt. The decision to keep strong cash reserves makes sense, given how volatile the company’s revenue generation can be, and this gives Coinbase room to maneuver during prolonged weak cryptocurrency markets.

We think staying relatively unleveraged will be an important step in keeping the company financially secure in the long term through market cycles. That said, the company will need to make sure it does not burn through too much of these reserves.

Read more about Coinbase Global’s financial strength.

Risk and Uncertainty

We give Coinbase an Uncertainty Rating of Very High. Coinbase gets more than half of its net revenue from trading fees at its exchange business. Fees are charged as a percentage of the underlying assets being traded, creating direct exposure to cryptocurrency prices. The cryptocurrency market itself is highly volatile and deeply cyclical. In 2022, Coinbase’s revenue fell more than 59% from the prior year as cryptocurrency prices collapsed.

Coinbase has made significant progress increasing its recurring revenue sources, most notably its stable coin business, but the company is still heavily exposed to market forces. Cryptocurrency is a highly speculative market, and the number of active traders on Coinbase’s platform can vary sharply based on market performance. The company is also exposed to falling interest rates through its participation in the USDC stablecoin, which generates revenue through interest income.

These risks are partially mitigated by the firm’s solid balance sheet. The company ended December 2025 with more than $11.2 billion in cash and almost $2 billion in cryptocurrency investments. These assets are held against $7.2 billion in debt.

Read more about Coinbase Global’s risk and uncertainty.

COIN Bulls Say

• There is a more favorable regulatory regime under the new presidential administration. New legislation could bring regulatory clarity to cryptocurrency in the United States, to Coinbase’s immediate benefit.
• Increased adoption of stablecoins could drive significant growth for Coinbase’s USDC revenue.
• There is a global market for cryptocurrency. Regulatory approval from international regulators could allow Coinbase to expand its operations and increase its footprint globally.

COIN Bears Say

• Cryptocurrency markets have historically been deeply cyclical, with long periods of low prices and depressed trading volume. Persistent cryptocurrency weakness could put significant pressure on Coinbase.
• A more favorable regulatory environment for cryptocurrency could lead to more competition for Coinbase’s core US market.
• Coinbase’s stable coin revenue is dependent on interest rates, falling interest rates could lead to lower stable coin revenue.

This article was compiled by Rachel Schlueter.