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

Coinbase Global released its second-quarter earnings report on July 30. Here’s Morningstar’s take on Coinbase Global’s earnings and stock.

Key Morningstar Metrics for Coinbase Global

• Fair Value Estimate
  : $150.00
• Morningstar Rating
  : ★★★
• Morningstar Economic Moat Rating
  : None
• Morningstar Uncertainty Rating
  : Very High

What We Thought of Coinbase Global’s Q2 Earnings

Coinbase reported another quarter of poor earnings as low trading volume continues to pressure the firm. Net revenue decreased 18.5% from last year to $1.22 billion. Meanwhile, the company had net losses of $359.5 million, or $105 million when excluding unrealized cryptocurrency losses.

Why it matters: Coinbase’s shares are trading in the mid-single-digit percentage range lower in after-hours trading on July 30. The market’s reaction here is understandable. While there are signs that Coinbase is performing well competitively, the firm’s financial performance highlights its persistent exposure to cryptocurrency prices.

• The main culprits behind Coinbase’s falling revenue were its trading and staking revenue, which decreased 21.6% and 43%, respectively, due to lower cryptocurrency trading activity and prices.
• We like Coinbase’s new strategy of becoming an “everything exchange” as it will reduce the firm’s reliance on the price performance of a single highly speculative asset class. However, Coinbase is in the early stages of this new approach, and its over $100 million in annualized prediction market revenue is still not a major driver for the company as a whole.

The bottom line: We will maintain our $150 fair value estimate for no-moat Coinbase. Despite the shares’ poor performance in 2026, we think Coinbase is fairly valued.

• While this was a weak quarter for Coinbase, we were aware of these headwinds going into the earnings release and expected trading revenue to decline. Additionally, we typically caution that cryptocurrency prices are inherently volatile and that investors should be wary of extrapolating strength or weakness from Coinbase’s quarterly earnings.
• That said, there is little reason to assume a quick recovery in cryptocurrency prices, and the firm could experience an extended period of poor performance. Fortunately, the firm is well equipped for a cryptocurrency winter, with over $8.5 billion in cash and investments on its balance sheet.

The following are excerpts from Morningstar’s company report on Coinbase Global.

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 $150 per share, which translates to a 2026 enterprise value/sales ratio of 6.03 times. We expect the firm’s 2026 revenue to be cyclically depressed due to weak cryptocurrency market conditions. The reduction in our fair value estimate came entirely from much lower near-term cryptocurrency trading revenue, a consequence of the continued selloff in cryptocurrency markets. This is partially offset by higher stablecoin revenue as we now expect faster growth for the fledging asset and for USDC to take market share away from Tether over time.

Coinbase’s largest source of revenue is trading fees, which are assessed as a percentage of the amount being traded on its platform. This ties its long-term revenue growth to the size of the overall cryptocurrency asset class, as well as its market share. Cryptocurrency is still a speculative asset class, and the number of available cryptocurrencies to trade, the space’s eventual market capitalizations, and even its continued existence are still major unknowns.

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. It has carved out a strong position in the cryptocurrency exchange industry by positioning itself as a reliable, regulation-compliant platform for buying and selling cryptocurrency in an industry marked by risk, weak security practices, and spotty regulatory enforcement. However, Coinbase is inherently reliant on the growth and success of bitcoin, ethereum, and other cryptocurrencies for generating returns on its invested capital.

Cryptocurrency remains highly speculative, and its long-term success and viability are by no means guaranteed. Coinbase has built a strong competitive position, but without more confidence in the long-term viability of cryptocurrency as an asset class, there is too much potential for its returns on invested capital to rapidly evaporate for us to award the company a moat. There are significant underlying risks that confidence and interest in cryptocurrencies could deteriorate further, or that government acquiescence of cryptocurrency shifts into deeper hostility.

Read more about Coinbase Global’s economic moat.

Financial Strength

Coinbase is in a strong financial position, though it needs to be, given the firm’s heavy exposure to cryptocurrency prices and volatility, which can lead to sharp swings in revenue and profitability. These risks are partially mitigated by the firm’s solid balance sheet. The company ended March 2026 with more than $10.2 billion in cash and over $1.6 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 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, while Coinbase’s strong balance sheet gives it time and options during market downturns, the company will need to make sure it does not burn through too much of these reserves and leave the firm at risk.

Read more about Coinbase Global’s financial strength.

Risk and Uncertainty

We give Coinbase an Uncertainty Rating of Very High. The cryptocurrency market itself is highly volatile and deeply cyclical. Coinbase has made significant progress increasing its recurring revenue sources, most notably its stablecoin 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.

Moreover, the company is 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.

There is also a material amount of environmental, social, and governance risk in Coinbase’s business. Coinbase operates with a broad scope, acting as an asset custodian, broker, and exchange in the cryptocurrency economy. This creates significant potential for conflicts of interest, which could lead to reputational damage or regulatory action. Additionally, Coinbase has access to a significant amount of client data that it must keep secure.

Read more about Coinbase Global’s risk and uncertainty.

COIN Bulls Say

• Coinbase’s vision to become an “everything exchange” could prove to be more successful than expected, driving faster revenue growth from new trading products.
• Increased adoption of stablecoins could drive significant growth for Coinbase’s USDC revenue.
• There is a global cryptocurrency market. Approval from international regulators could allow Coinbase to expand its operations and increase its footprint.

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 stablecoin revenue depends on interest rates. Falling interest rates could lead to lower stablecoin revenue.

This article was compiled by Irza Waraich.