Despite the reputational hit to crypto from FTX’s collapse, the crisis could benefit Coinbase’s competitive position.
SoFi stock’s fair value estimate to be maintained at $15 per share.
No significant change expected to Coinbase stock’s fair value estimate of $110.
Material changes to SoFi stock’s $15 fair value estimate aren’t expected.
While shares are trading well below our fair value estimate, we empathize over the very high levels of risk facing investors.
Coinbase's cost structure has grown dramatically in just a few quarters.
The growth in net interest income is of particular note, as increasing interest income is a key part of SoFi's strategic plan, and the main motivation behind its bank charter.
No-moat SoFi Technologies reported strong fourth-quarter results with impressive user growth and student loan origination volumes that came in above our expectations for the quarter.
Given the significant volatility of the cryptocurrency market, Coinbase’s growth is often unreliable.
We like the deal from a strategic standpoint, not the idea of an all-stock acquisition using undervalued shares.
We think inflation pressures are feeding through from behind the scenes.
Third-quarter results were weak, with net revenue falling 39% and pretax income declining 69% sequentially.
The firm is well-positioned for success, but there’s still much to unpack about the nascent cryptocurrency trading space.
The strength of Coinbase's performance during the quarter, as well as continued cryptocurrency volatility since end of June, has led us to increase our short-term expectations and increase our fair value estimate to $201 from $194.
Coinbase is the largest cryptocurrency exchange in the US, giving it a strong position in an admittedly uncertain industry.