3 Earnings Misses Later, Wall Street Still Sees 40%+ Upside in Coinbase

Coinbase's third miss put the debate back on the tape

This is the real COIN showdown: $1.36 per-share loss, revenue fell to $1.2 billion, and a third straight quarter of earnings below Wall Street expectations have kept the pressure on the stock. Even so, one analyst still sits at a Buy rating and $310 price target. That is the core contradiction. Bears see a broken crypto-beta name. Bulls see a platform stuck in a weak market cycle.

The miss streak is real. Revenue fell to $1.2 billion from $1.5 billion, transaction revenue reached $599 million, and stablecoin revenue declined to $292 million. So did the tape: industrywide spot trading volumes slid more than 20% while crypto market capitalization shrank by double digits.

But this is not being judged as a one-quarter beat story. COIN still trades 64% below its $445 52-week high, and a 35-analyst panel puts the mean price target at $227, or 42% above the current share price. That helps explain why the bull case is about patience and a possible re-rating rather than near-term perfection.

Why bulls still see more than a broken cycle

After another disappointment, the bull case is less about an immediate Bitcoin bounce and more about whether Coinbase is building a sturdier platform before the next volume surge. The key points are market-share gains, revenue diversification, and a leaner cost base.

Market share is rising even in a soft market

The mechanism is straightforward: if Coinbase keeps taking liquidity in a weak market, the next upside move starts from a stronger position. In the quarter, crypto trading volume market share reached 10.3%, marking the third consecutive quarter of gains. That matters because exchanges become more valuable when traders, institutions, liquidity providers, and product users are already embedded in the platform.

Revenue mix also supports that argument. Coinbase said 88% of net revenue is non-BTC spot trading, which suggests the old COIN equals Bitcoin-beta framing may be oversimplified. Bulls also point to newer pockets of activity: prediction markets contracts and revenue grew 106% quarter-over-quarter, while average USDC held in Coinbase products reached an all-time high of $20 billion. For bulls, that is evidence that Coinbase is trying to become more than a trading venue.

Profitability is still positive even after the reset

Wall Street has not abandoned the stock because Coinbase is still showing some resilience under pressure. The company reported a 14th consecutive quarter of positive Adjusted EBITDA, even as the quarter itself was weak. That does not erase the miss streak, but it supports the view that the business is still operating rather than drifting into a structural freefall.

The May restructuring deepens that argument. Coinbase cut headcount 14% and removed $500 million in costs, and TIKR's mid-case work assumes EBITDA margin could move from 21.5% in the March quarter to 41.5% by June 2027. For long-term bulls, that is the operating-leverage setup: if volume recovers, a lighter cost base could let profit rise faster than revenue.

Why the bear case still matters

Share gains and better cost discipline help Coinbase, but they do not remove the main vulnerability: in the near term, financial results still depend heavily on absolute trading volume. A platform can hold its position in a weak tape and still post weaker numbers if the market as a whole stays soft.

This quarter, crypto trading activity fell 21% and industrywide spot trading volumes slid more than 20%. Bears argue that until that changes, Coinbase remains exposed to the same cyclicality investors have criticized for years.

The estimate cuts reinforce that point. HC Wainwright cut its Q2 2026 EPS forecast to a $0.02 loss from $0.05 of earnings while maintaining a Buy rating, and the same firm still sees a $0.15-per-share loss for FY2026. Meanwhile, Baird cut its target to $142 and turned Neutral. In other words, the long-term story can stay alive even as near-term expectations are repriced lower.

The main bearish pressures are straightforward: - Diversification may support the long-term case, but it is still early as a current revenue buffer. - If the market stays soft long enough, weaker volume can overwhelm share gains and margin progress. - Stablecoin revenue remains a key watchpoint after falling to $292 million.

What has to happen before the stock regains momentum

The next major checkpoint is the forecasted Oct. 29 earnings date. After a third straight earnings miss and at least one Buy-side model still showing a $0.15-per-share loss for FY2026, the debate is no longer just about narrative. Investors need evidence that Coinbase's platform gains can hold up in a soft tape and translate into better results when volume returns.

Signals that would strengthen the bull case

• Crypto demand stops contracting, reversing the 21% decline in crypto trading activity.
• Adjusted EBITDA remains stable or improves, extending the streak of positive Adjusted EBITDA.
• Expense control remains tight after the May restructuring removed $500 million in costs.
• Newer product activity continues to matter, including prediction markets contracts and revenue grew 106% quarter-over-quarter and average USDC held in Coinbase products reached an all-time high of $20 billion.

Signals that would weaken it

• Another volume-led miss keeps the miss streak intact.
• Stablecoin revenue slips again from $292 million, limiting how much credit the market gives the diversification story.
• The run of third consecutive quarter of gains in market share stalls.

Wall Street still seems to be underwriting a longer-term rebound plus a leaner cost structure, not forgiving Coinbase's recent earnings volatility. Whether that view proves right will depend less on vibes than on whether demand and profitability improve together.