Wall Street analysts have trimmed their price targets for Coinbase after the exchange missed earnings for the third straight quarter, yet most remain confident enough to keep buy recommendations intact. Despite the repeated disappointments, few have downgraded their stance on the stock.
Coinbase reported a $359.5 million loss, or $1.36 per share, in the quarter ending June 30. This was significantly worse than the 17-cent loss analysts had expected. Revenue came in at $1.22 billion, falling short of the $1.29 billion forecast and down from $1.5 billion a year earlier. The main culprit was a 24% drop in trading volume compared to the previous quarter, driven by subdued market volatility that dampened customer activity.
Subscriptions, which contributed $555 million, also failed to meet expectations of $594 million. The stock has now faced three consecutive quarters of losses, causing price targets to fall but not ratings. Benchmark cut its target to $230 from $270, Needham to $177, Rosenblatt to $200, and Baird to $130, all maintaining buy ratings and viewing the slump as temporary. Barclays stood out as a bearish voice with a sell rating and a $95 target, while Bernstein and Citizens held firm with targets around $325-$330, citing cost-cutting measures and job reductions implemented in May as positive signs.
Why Investors Still Back Coinbase
The optimism isn’t tied to trading fees, which have struggled, but to Coinbase’s broader ambitions. The exchange captured a record 10.3% share of all crypto trading and saw its prediction market revenue double in just three months. Paid memberships for Coinbase One reached all-time highs, and the company is expanding into perpetual futures and stock trading, branding itself an “everything exchange.”
One setback is the delay in new USD Coin (USDC) features, with banks raising concerns about USDC’s economic model. However, Circle’s leadership argues that stablecoins will surpass crypto trading as payment methods evolve a shift Coinbase needs to capitalize on quickly to sustain growth.
This information is for educational purposes and does not constitute financial advice.
