Coinbase Shares Fall 14.5% After Weak Q2 Earnings And Analyst Downgrades

Coinbase Global Inc. (COIN) shares fell sharply on Friday following the release of its second-quarter earnings, which analysts described as underwhelming amid a broader earnings season for crypto firms. The firm reported a 26% sequential drop in revenue to $1.497 billion, with adjusted EBITDA falling 45% to $512 million. Analysts highlighted concerns over declining trading volumes and the company’s strategic investments amid a challenging market environment.

JPMorgan analyst Kenneth Worthington downgraded the price target from $404 to $342, maintaining a Neutral rating. He noted that Coinbase’s second-quarter performance was “somewhat of a messy print,” with the firm losing market share as industry-wide trading volumes declined 26% sequentially, while Coinbase’s volumes fell 40%. Worthington emphasized that the company’s adjusted EBITDA margins remain under pressure due to ongoing investments despite a weak top line.

Goldman Sachs analyst James Yaro also kept a Neutral rating but raised the price target to $348 from $305. Yaro noted that Coinbase’s earnings excluding one-time items came in at $1.45 per share, below the $1.52 consensus estimate. However, he pointed to a more favorable macro environment for crypto, including greater regulatory clarity, and highlighted that the company’s July crypto trading revenue of $360 million suggests stronger-than-expected performance for the third quarter.

Needham analyst John Todaro reiterated a Buy rating and raised the price target to $400 from $270. Despite a modest revenue and earnings miss, Todaro praised Coinbase’s product expansion into tokenized assets and deeper integrations with Base. However, he expressed concerns over rising general and administrative as well as technology and development expenses, which may reflect the end of a crypto market cycle. He noted, however, that crypto trading volumes rebounded strongly in July.

Canaccord Genuity analyst Joseph Vafi maintained a Buy rating and $400 price target. Vafi emphasized a strategic shift in focus from trading volumes to a broader picture shaped by improved U.S. regulation, rising crypto spot prices, and Coinbase’s position as a preferred partner for traditional finance (Tradfi) and enterprise clients seeking to enter the crypto space.

Rosenblatt Securities analyst Chris Brendler reiterated a Buy rating and $470 price target. Brendler noted that Coinbase’s total revenue of $1.5 billion missed estimates by 6%, but transaction revenues exceeded expectations due to higher consumer take rates. He also highlighted that the company expects July transaction revenue to reach $360 million, a 40% increase from the second-quarter average.

At the time of publication, Coinbase shares had fallen 14.51% to $322.94 [1].

Source:

[1] Coinbase Stock Slides As Analysts Weigh In On Q2, Market Share Drop, Investment Strategy

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