Coinbase has a strong balance sheet with $6.4bn in cash and $3.5bn in retained earnings as well as attractive gross and profit margins of 86% and 40% respectively.It heavily invests in its institutional offering which should diversify its revenue stream over time and suppress the stock’s volatility.Its TAM is expected to grow at a CAGR of 18%, but there are prospects to capture the market share of other assets.It generated FCF of $2.8bn for the first nine months of 2021 and the FCF model based on conservative assumptions indicates the stock is undervalued by 80% at the current market price of $200.
