Coinbase: The 16x EV/Adjusted Ebitda Valuation Remains Attractive

Summary Coinbase remains a Buy, supported by resilient Subscription and Services growth and a fair EV/adjusted EBITDA multiple of 16.3x. COIN's transaction revenues contracted 55% YoY in Q4 2025, reflecting Bitcoin price cyclicality, but I expect a moderate rebound in 2026. Subscription and Services revenue grew 23% to $2.83B in 2025, now 41% of net revenues, justifying a SaaS-like valuation approach. Risks include prolonged Bitcoin price weakness and competitive threats from traditional financial institutions entering the crypto market. This is my second coverage of Coinbase ( COIN ), following my previous article published about a year ago. In that article I analyzed Coinbase, arguing that transaction revenues peaked and would potentially retreat due to the cyclicality of the Bitcoin price. The second argument was that Subscription and services would continue to consistently grow and provide predictable SaaS revenue. Based on the 2025 financial results, I conclude that both of my projections have fully panned out. In this update, I will discuss these projections and what I expect for the foreseeable future. Additionally, I will analyze their recent Q4 earnings release, the GAAP losses, and lastly, I will provide my valuation estimates to justify the continued "Buy" rating. Contraction in Transaction Revenue In my previous 2025 article, I noted that Q4 2024 was an exceptionally strong quarter due to Bitcoin being near its peak and the hype surrounding cryptocurrencies being sky-high. I estimated that once the Bitcoin price dropped, the hype would subside, consequently lowering the transaction revenues, similarly to the 2021-2022 crypto period, after which the revenues contracted sharply. Q4 2025 further validated my thesis, as the transaction revenues contracted approx. 55% compared to Q4 2024. This was to be expected as the Bitcoin price dropped significantly in the second half of 2025. Although the management didn’t give any specific transaction revenue guidance, I am optimistic and believe that the Bitcoin price is likely to reverse in the near term. My reasoning is based on the technical analysis of the Bitcoin price and also the macro uncertainty surrounding the Iran war attracting investors to relatively safe assets like Bitcoin and gold. A rise in the Bitcoin price would in turn impact transaction revenues. I strongly believe we will see transaction revenues return to growth in 2026 at a moderate pace of low double digits. Subscription and Services Revenue The second main pillar of my previous thesis was the projected growth in the Subscription and Services segment. In 2024 it amounted to $2.3 billion. For the full year 2025, the segment grew approx. 23% to $2.83 billion. In the same year, subscription and services revenue accounted for 41% of net revenues. Therefore, I would argue Coinbase should trade closer to a SaaS company due to the revenue predictability of the segment. I will use this assumption in the valuation chapter. I would also like to point out that stablecoin revenue was the fastest expanding subsegment, with revenues reaching $1.35 billion. In late 2025, the Federal Reserve cut rates, but growth remained strong due to sheer volume growth, driven by the popularity of USDC. Any further rate cuts could present a headwind for the segment. Still, as long as USDC holdings are consistently reaching new highs, I remain bullish, and potential rate cuts are just a temporary headache. Valuation In this update, I will use the EV/Adjusted EBITDA valuation metric. I cannot use the GAAP P/E multiple the same way I used it in the last article because of the large unrealized net loss in Q4. In the earnings presentation, Coinbase stated that "Q4 net loss was $667 million driven by a $718 million loss on our crypto asset investment portfolio which was largely unrealized, and $395 million loss on our strategic investments (which include our investment in CRCL)." I believe it is best not to consider such noise, as it might give an improper picture of the profitability. According to Seeking Alpha , TMM GAAP EBITDA multiple is approx. 31x, but this includes the aforementioned Q4 GAAP net loss. Thus, we have to do the calculation ourselves. At the time of writing, Coinbase’s market cap is $51.4 billion. In Q4 the company had $11.6 billion in cash & cash equivalents and $5.9 billion in long-term debt. This results in Coinbase’s enterprise value of $45.7 billion. According to the shareholder presentation, 2025 adjusted EBITDA was approx. $2.8 billion, making the EV/adjusted EBITDA multiple 16.3x. To consider if such a number is reasonable, we must consider expected growth. Analysts estimate that FY2026 revenues will be roughly the same compared to FY 2025, before reaccelerating to 20% YoY growth in 2027. For easier calculation, let’s use an annual growth of roughly 10-15%. I am estimating a bit higher annual growth due to their history of frequently beating analysts' estimates and a potential rebound of the Bitcoin price. I believe that accounting for the projected growth and a large part of revenues being SaaS-like, Coinbase's fair valuation should be somewhere between a 12-18x EV/adjusted EBITDA multiple. The current 16.3x multiple is near the high end, but there is still some upside. As such, I believe the fair valuation is still a "Buy." Risks The main risk to my bullish thesis is if the Bitcoin price remains depressed for longer, delaying the potential rebound in revenue growth. Still, I believe the macro uncertainty around the Iranian war and the possibility of persistent inflation could provide a basis for Bitcoin's price reversal. The second risk is competitive uncertainty. If traditional financial institutions, like large banks and stock brokers, continue to expand their operations into the crypto market, this could create fear of increased competition, negatively impacting Coinbase’s moat and the stock price. Plan I believe that Coinbase is not significantly undervalued but is instead in the fair value range. For the investors who agree the current macroeconomic uncertainty will provide the basis for Bitcoin price appreciation, this stock is a "Buy." I count myself among such investors and plan to open small positions on dips.