Coinbase Analyst Spells Bull Case: Forcasts $1.26B Additional Revenue From NFTs Alone

Needham analyst John Todaro has outlined a bullish scenario for Coinbase Global Inc COIN if its upcoming non fungible token (NFT) business takes off as planned.

What Happened: In a research note to clients on Thursday, Todaro said Coinbase’s NFT segment could add $1.26 billion to the firm’s annual revenue in an aggressive bull scenario.

“In our aggressive bull [case,] we estimate annualized revenue at a scale of [$1.26 billion,] which would represent an added EV of $10.1Bn, $12.6Bn, and $13.4Bn at 8x, 10x, and 13x multiples respectively,” the analyst said.

Todaro based his estimates on comparing how the cryptocurrency exchange’s upcoming NFT vertical would shape up next to leading NFT marketplaces such as OpenSea.

OpenSea is said to be valued at over $13 billion and has an all-time NFT sales volume of over $20 billion.

“Given COIN's historically elevated fees relative to exchange rivals and its wide adoption among retail users, we expect COIN to have a fee schedule that is similar to its spot trading offering in comparison with peers,” wrote Todaro, in the note.

Earlier this week, Coinbase said it intends to launch its NFT marketplace “soon.” The cryptocurrency exchange said it has met with over 100 creators and is continuously incorporating feedback to bring the product to market.

Brian Armstrong, CEO of Coinbase, said he expects the company’s NFT business to be bigger than its current cryptocurrency offerings like Bitcoin BTC/USD, Ethereum ETH/USD and Dogecoin DOGE/USD.

Price Action: Coinbase shares closed 2.72% higher on Tuesday at $177.2 per share.

Photo courtesy: Coinbase