Coinbase(US:COIN) First Shanghai Securities·2024-06-14 01:22Investment Rating - The report assigns a "Buy" rating to Coinbase with a target price of $317.60, representing a potential upside of 24.57% from the current closing price [1][6]. Core Insights - Coinbase, founded in June 2012, is the largest cryptocurrency exchange in the U.S. and the first publicly listed cryptocurrency exchange globally, having gone public on NASDAQ on April 14, 2021 [1][4]. - The company reported Q1 2024 total revenue of $1.64 billion, exceeding analyst expectations of $1.34 billion, and achieved a net profit of $1.18 billion, a significant turnaround from a loss of $78.9 million in the same period last year [1][4]. - Revenue is primarily derived from trading, subscription, and service income, with respective contributions of 65.8%, 31.2%, and 3.0% in Q1 2024 [1][30]. Summary by Sections Company Overview - Coinbase provides a range of services including storage, trading, investment, payment, and transfer of cryptocurrencies, and has expanded its operations internationally [4][34]. - The company has attracted significant institutional investment, indicating strong market recognition and confidence in its business model [11][28]. Revenue Composition - The revenue growth is attributed to increased market volatility, rising cryptocurrency prices, user base expansion, and the active Base ecosystem [1][45]. - The report highlights that trading revenue surged due to heightened trading activity driven by market conditions and user engagement [1][45]. Financial Analysis - The financial outlook for Coinbase shows a projected revenue of $6.41 billion for 2024, reflecting a year-over-year growth of 106.28% [7]. - The adjusted EBITDA for Q1 2024 was reported at $1.01 billion, marking a significant recovery from previous losses [1][7]. Market Dynamics - The approval of Bitcoin ETFs is seen as a pivotal milestone that enhances liquidity, broadens the user base, and increases market recognition for cryptocurrency exchanges [1][63]. - The competitive landscape is dominated by a few major exchanges, with Binance leading in global influence and trading volume [1][64]. Management Team - Coinbase's management team is noted for its extensive experience and industry insight, which has been crucial for navigating the competitive cryptocurrency market [28][41]. Future Outlook - The report anticipates continued growth for Coinbase as it aims to become a decentralized super application, offering a wide range of services including social, communication, and DeFi interfaces [27][34].