The shares need about $3.35 of 2027 earnings at 32 times to hold $107. I model $2.73 after stripping one-time gains and slower crypto, so $87 in twelve months.
Key points
- $107 requires about $3.35 of 2027 earnings at 32 times diluted shares.
- $2.73 is my 2027 EPS after taking out the $0.14 Q2 investment gain and slower crypto.
- 12% of Q2 revenue was event contracts, versus 1% a year earlier.
The call
The market is too optimistic. At $107.29 and about 910 million diluted shares, a 32-times multiple on next year’s profit needs $3.35 a share, or roughly $3.0 billion of net income. That treats event-contract mix, 57% adjusted EBITDA, and record volumes as a run rate.
I believe 2027 earnings land nearer $2.73. Q2 GAAP of $0.62 included $0.14 of deconsolidation and mark-to-market gains. Crypto transaction revenue fell 38% year over year. Expense discipline is real, but trading mix and rates do not support a $3 print.
Revenue by quarter ($ billions)SEC filings through Q2 2026; 2026-27 figures are the desk's estimates.
Valuation
| Item | Figure |
|---|
| 2026 revenue (desk) | $5.5 billion |
| 2027 revenue (desk) | $6.5 billion |
| 2027 net income (desk) | $2.47 billion |
| Diluted shares | 905 million |
| 2027 EPS (desk) | $2.73 |
| Target at 32 times | $87 |
A 32-times multiple is rich for a broker whose revenue still swings with volumes and rebates, but it matches what high-growth fintechs have paid when deposits compound. Asymmetry is skewed: if event contracts stay 12% of sales, the stock can re-rate toward $107; if they fade, 25 times $2.50 is about $63.
Q2 2026 revenue mixJune 30 2026 Form 10-Q, filed July 29 2026.
Risks
- Event-contract volumes keep rising after Q3, lifting the mix above 12% of revenue.
- Margin balances stay near $21.5 billion and rates hold, so net interest offsets weaker crypto.
- Weekend trading or perpetual futures launch without a regulatory delay.
What would change my mind
Q3 2026 EPS above $0.70 without investment gains, with event contracts still at least 12% of net revenue.