Seven Wall Street firms reduced their price targets for Coinbase (COIN) on Friday following weak trading activity in early October. Trading fees totaled approximately $165 million through October 25, and the stock fell 6% to $150.75 before market open.
The analyst cuts reflect concerns about declining cryptocurrency trading volume. Transaction revenue makes up nearly half of Coinbase's revenue, so reduced trading activity directly impacts earnings forecasts. During the third quarter, Coinbase generated $1.22 billion in total revenue, with transaction revenue accounting for $590 million.
Price Target Changes
Barclays made the most aggressive cut, lowering its target to $120 from $149, a 25% reduction from Thursday's closing price of $160.59. Other adjustments included:
- Mizuho: cut to $145 from $155
- Wells Fargo: cut to $174 from $200
- Compass Point: cut to $165 from $187
- Needham: cut to $197 from $205
- Canaccord: cut to $275 from $300
- Jefferies: cut to $174 from $183
Mizuho projected approximately $607 million in Q4 transaction revenue, slightly above Q3's $590 million but 11% below the $684 million consensus estimate.
Q3 Performance and Broader Concerns
Q3 transaction revenue declined 44% year-over-year according to Coinbase's regulatory filing. The company's reported $718.7 million quarterly profit was largely driven by paper gains rather than operational earnings, with a $715 million unrealized cryptocurrency gain contributing significantly to net income.
Early October trading weakness may not fully determine quarterly results. Historical patterns show similar slow starts have recovered; for example, Coinbase reported $130 million in transaction revenue through July 26 before Q2 closed at higher levels, leading to Q3 reaching $590 million.
Other Developments
Coinbase lowered its 2026 adjusted expense guidance to $4.15 billion to $4.3 billion. The company reported that average holdings of USDC, a dollar-pegged stablecoin, reached a record $22 billion on its platform. Prediction markets on Coinbase passed $200 million in annualized revenue.
Pre-set share sales by CEO Brian Armstrong, co-founder Fred Ehrsam, and President Emilie Choi are scheduled to begin November 16, covering up to 13.6 million shares combined.
The analyst downgrades arrived as crypto stocks declined following a reported $6.3 billion hack at Binance, which said withdrawals should resume within 48 hours.
