Coinbase (COIN) shares fell back to their lowest levels in roughly two and a half years on Friday morning after the crypto exchange reported weaker-than-expected second-quarter results, though the stock later pared losses to trade around $150.
Shares remain down roughly 57% over the past year as Wall Street analysts debate whether they should blame the earnings miss more on a weak crypto market or potential flaws in the company's growth strategy.
Wall Street largely agreed the quarter fell short of expectations.
JPMorgan said Coinbase's results reflected a "tough crypto environment" with "limited P&L upside from new products," while Bernstein wrote that although the company's long-term strategy remains compelling, investors are "looking for more inspiring execution."
JPMorgan cut its December 2026 price target to $148 from $196 while maintaining an Overweight rating, saying the company is facing "pressure in multiple businesses" as softer crypto trading numbers weighed down transaction revenue and subscription and services revenue.
The bank argues that Coinbase's newer business segments like prediction markets and tokenized equities have yet to make a substantial contribution to earnings.
The next growth engine
Bernstein maintained its Outperform rating and $330 price target, the highest among the notes reviewed by The Block, saying that it sees Coinbase's pursuit of becoming an "everything exchange" as the best strategy considering the current market.
The brokerage said Coinbase is successfully moving beyond depending on volatile crypto trading into promising verticals like stablecoins, payments, tokenized real-world assets, prediction markets and perpetual futures, even though it hasn't established itself as a standout leader in any of those categories.
Bernstein pointed to prediction markets as one example, arguing Robinhood has already pulled ahead through its integrated Rothera exchange. While Coinbase disclosed its prediction markets have generated $100 million in annualized revenue after doubling this past quarter, Robinhood's business has already scaled to roughly $600 million annually.
Mizuho echoes some of those competitive concerns, lowering its price target to $155 from $200 while maintaining a Neutral rating. Calling Coinbase a "good franchise" facing "tougher math," the firm said Coinbase's subscription and services business is "not yet big or predictable enough" to offset its dependence on crypto trading. It similarly argues that Robinhood is eating Coinbase's lunch and becoming the alternative platform for mainstream spot crypto traders.
Benchmark was perhaps the most optimistic of the bunch, despite also lowering its price target to $230 from $270. The firm argued investors were putting too much emphasis on the earnings miss and were overlooking Coinbase's third consecutive quarter of market share gains and the exchange becoming less reliant on retail crypto trading by diversifying its offerings.
"[B]eneath COIN’s headline shortfalls was a quarter that, in our view, provided additional validation of the strategic transformation that has been underway at the company for the better part of three years," Benchmark's Mark Palmer wrote in a note to clients.
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