Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
With almost 3 times the revenue predicted by market analyst DA Davidson, Coinbase is likely heading for a bumper listing next week. Da Davidson pegs COIN stock price to $400+ per share.
Earlier this week on Tuesday, April 6, Coinbase announced the first quarter estimated results with mind-blowing figures. The company reported a revenue of $1.8 billion with a net income of around $800 million. Besides, the platform also reported 56 million verified users with 6.1 million monthly transacting users. Coinbase’s assets have topped $223 billion nearly 125% up from $90.3 billion by the end of 2020. This is massive considering it is nearly 25% of the overall crypto market cap. Also, the trading volume has nearly doubled to $335 billion from $193 in the previous quarter. Coinbase is all headed for the listing of its COIN shares on Nasdaq ahead this month on April 14.
Interestingly, Coinbase’s $18 billion revenue beats DA Davidson’s estimates of $614 million. Trading volumes have been higher than estimates while the expenses have been lower.
As a result, DA Davidson has increased its price target for the COIN shares by 125% to $440 from $195 previously. Davidson estimated that Coinbase will have 205 million outstanding shares. Although the share count might change, Gil Luria, head of institutional research at Davidson, said that it leads to $90 billion valuations. The note from Davidson reads:
“Coinbase reported preliminary 1Q21 results prior to [its] direct listing that were multiples higher than our estimates on both the top and bottom lines. We continue to believe COIN’s product experience and best-in-class compliance and regulatory controls should provide a defensible moat.”
Davidson expects Coinbase’s annual revenue for 2021 to hit $4.4 billion.
Comparison with Industry Peers
Coinbase has registered a steep growth in terms of its revenue as well as its monthly active users. Over the last quarter, Coinbase’s monthly active users surged by a massive 2.8 million. Also, the total verified users from Coinbase jumped from 43 million to 56 million.
During Q4 2020, Schwabb added 16 million new clients that majorly included nearly 15 million new brokerage accounts from the TD Ameritrade merger. The merged company has 29 million brokerage accounts.
On the other hand, the millennial’s favorite Robinhood which dabbled into crypto trading back in 2018 has 13 million customers as of date. Robinhood has already announced its intention to go public ahead this year.
As Coinbase goes public the next week, a $300 COIN share price will give the company a $100 billion valuation. As it turns out, Coinbase is now bigger than the financial giant Intercontinental Exchange (ICE), which owns the New York Stock Exchange (NYSE).