In a week marked by volatility, Coinbase stock has experienced significant fluctuations following the release of its fourth-quarter earnings, leading to a series of downgrades from analysts on Wall Street. The crypto exchange giant now finds itself navigating a wide price target range between $150 and $440, as industry experts grapple with concerns about whether recent performance dips reflect only temporary market challenges or indicate more profound, structural issues.
Piper Sandler delivered a particularly sobering assessment, slashing its price target for Coinbase from $270 to $150 while keeping a neutral rating on the stock. This drastic move came in the wake of Coinbase’s Q4 earnings report, which revealed an adjusted EBITDA of $566 million; a figure that, while respectable, fell short of analyst expectations. The company did, however, report total revenues of $1.71 billion, surpassing estimates by 3%.
The heart of the concern lies in Coinbase’s forward guidance. The company projected Q1 2026 subscription and services revenues to be between $550 million and $630 million, with the midpoint falling 27% below analyst expectations. In light of these revelations, Piper Sandler adjusted its EPS forecasts for 2026 and 2027 down to $1.42 and $2.59, respectively, from earlier estimates of $2.54 and $3.07.
Transaction revenue, an area analysts closely monitor, also saw a downward trend. Coinbase reported about $420 million in trading revenues through early February, indicating a potential 7% decline compared to the previous quarter. The company’s blended take rate for trading volumes was slightly above expectations at 36 basis points, comparing favorably against Piper’s estimate of 34.
In a contrasting move, Benchmark analyst Mark Palmer opted to maintain a buy rating while reducing his price target for Coinbase from $421 to $267. Notably, Palmer lowered his EPS estimate for the full year 2026 by 21% to $5.34, reflecting a cautious outlook with first-quarter EPS projections 19% below consensus at $0.96.
Adapting to the Changing Landscape
Palmer’s analysis highlights notable shifts in Coinbase’s revenue structure amid challenging market conditions. The company’s latest quarter recorded a 37% increase in institutional transaction revenue, totaling $185 million, largely attributable to the acquisition of Deribit, a crypto options exchange, for $2.9 billion last August. This growth signals Coinbase’s potential to bolster its offerings in the derivatives space, which CEO Brian Armstrong has earmarked as a significant growth avenue for 2026 and beyond.
In addition, the company saw stablecoin revenue rise 3% to $364 million, despite a cooling crypto market. As of the end of the quarter, average balances for USD Coin (USDC) hit historic highs, indicating solid demand even during market fluctuations.
The changing revenue mix also stands out: subscription and services revenue accounted for 43% of total net revenue in Q4, reaching $727.4 million. For the year, subscription and services revenue was $2.8 billion, representing a 23% increase year-on-year and a staggering 5.5 times the peak reached in the 2021 cycle.
Q4 Earnings Summary: A Mixed Bag
Coinbase wrapped up Q4 2025 with a net revenue of $1.71 billion, a 5% decrease from the previous quarter, in line with prior guidance but falling short of the anticipated $1.81 billion. Transaction revenue declined by 6% to $983 million, reflective of a broader 11% drop in the total crypto market cap during this timeframe.
On a GAAP basis, the company recorded a significant net loss of $667 million, largely due to a $718 million unrealized loss on its crypto portfolio, alongside $395 million in strategic investment losses. While operating expenses reached $1.51 billion, they remained slightly below projections.
Reactions from other analysts have been mixed; Bernstein reaffirmed an outperform rating with a lofty target of $440, asserting that the stock remains undervalued at roughly 11 times enterprise value to estimated 2025 earnings. Conversely, Canaccord revisited its price target, reducing it to $300 from $400 while still maintaining a buy recommendation.
As Coinbase looks ahead, it ends 2025 with a robust $11.3 billion in cash, bolstered by a significant $1.7 billion stock repurchase in Q4. Furthermore, the board has authorized an additional $2 billion for buybacks, while management has projected steady expenses in the first quarter of 2026. As the crypto landscape continues to evolve, Coinbase’s adaptability will be crucial in weathering the current downturn.
