A good, no-BS thread explaining the bear angle for $COIN. I am long the stock and have a few counterpoints which I'll dive into below.
h/t @Pigeonomics for referringhttps://twitter.com/eriz35/status/1415296398971621380 …
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The thing is, Jan-May 2021 was SUCH an outlier that volumes don't have to do much from here (and can even continue lower) for Coinbase to still have a
year.
More detailed explanation below from a piece I wrote in May:pic.twitter.com/3GYn4WZp7f
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I still think Coinbase can hit $6 billion in revenue this year based on crazy volumes in 1H 2021 and sluggish volumes in 2H. The 45% net margins I reference above is a bit high - if we cut that to 35% we get $6B x 35% = $2.1B in net income.
$COIN mkt cap of $63B / 2.1 = 30x PE
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Where I see good risk/reward is considering the prospect of more crypto blowups later in the year, which would take Coinbase's revenue past $6B and earnings much higher than $2.1B. Idk what will happen to crypto this year but odds are volatility will return.
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