Using the Earnings Power Value framework with a WACC of 7.2% and normalized earnings of $546.2M, Coinbase Global, Inc. has a fair value of $38.31 per share. The EPV range is $33.80 – $45.19 based on WACC sensitivity (5.7% – 8.7%).
| Low | Selected | High | |
|---|---|---|---|
| Normalized Earnings | 546 | 546 | 546 |
| (/) WACC | 8.7% | 7.2% | 5.7% |
| Enterprise Value | 6,254 | 7,550 | 9,525 |
| (-) Net debt | -3,454 | -3,454 | -3,454 |
| Equity Value | 9,708 | 11,004 | 12,979 |
| (/) Outstanding shares | 287 | 287 | 287 |
| Fair Price | $33.80 | $38.31 | $45.19 |
Earnings Power Value (EPV) estimates what a company is worth based on its current normalized earnings, assuming zero growth. It values the business as a perpetuity: Normalized Earnings / WACC. This gives a conservative floor value — the company's worth if it never grows but maintains its current profitability.
The model normalizes earnings by: (1) using sustainable gross margins (5-year average) applied to current revenue, (2) deducting maintenance-level operating expenses (average R&D + SG&A as % of revenue), (3) applying the average effective tax rate, and (4) subtracting the average excess of CapEx over D&A (net reinvestment needed to maintain current capacity).
EPV is most useful as a comparison anchor: if the market price is below EPV, the stock may be undervalued even without any growth. If market price exceeds EPV, the premium reflects growth expectations — which may or may not materialize.