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Seeking Alpha 2022-04-26 18:23:28

Coinbase: My Reverse DCF Proves How Cheap It Is

At a share price of $133.50, the market is severely under-anticipating Coinbase's future growth.According to my reverse DCF model, the market is anticipating both margin compression and a 5-year revenue CAGR of -4.52%.I believe this severely underestimates the potential that Coinbase has to grow in the future and therefore believe investors should fade the recent sell off and buy at current levels.Modeling in a scenario in which margins compress, but revenues grow at a 5-Year CAGR of 5%, the fair share price of Coinbase is $194.44, ~45% above current levels.

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