TLDR
- Piper Sandler reduced Coinbase’s price target from $270 to $150, citing weak Q1 2026 guidance where the midpoint for subscription revenue was 27% below consensus expectations.
- Coinbase’s Q4 2025 earnings fell short of estimates, with adjusted EBITDA at $566 million, even though revenues of $1.71 billion surpassed expectations by 3%. The stock has declined 37.61% year-to-date.
- Benchmark lowered its price target by 37% to $267 from $421 but maintained a buy rating, and decreased its full-year 2026 EPS estimate by 21% to $5.34.
- Institutional transaction revenue increased by 37% to $185 million, boosted by the Deribit acquisition, while subscription revenue accounted for 43% of total revenue at $727.4 million.
- Coinbase concluded 2025 with $11.3 billion in cash and approved an additional $2 billion in share buybacks, following $1.7 billion in repurchases during Q4.
Coinbase stock experienced volatility this week following fourth-quarter earnings that led to significant price target reductions from Wall Street analysts. The cryptocurrency exchange platform’s stock is now subject to price targets ranging from $150 to $440, as firms assess whether recent underperformance is due to temporary market challenges or more fundamental structural issues.
Piper Sandler issued the most critical assessment on Friday. The firm decreased its price target from $270 to $150 while keeping a neutral rating on the stock. This action followed Coinbase’s fourth-quarter report, which showed adjusted EBITDA of $566 million, missing analyst expectations despite total net revenues of $1.71 billion exceeding estimates by 3%.
The primary concern stemmed from forward guidance. Coinbase anticipates Q1 2026 subscription and services revenues to be between $550 million and $630 million. The midpoint of this range is 27% lower than what Wall Street had projected. This discrepancy prompted Piper Sandler to significantly reduce its 2026 and 2027 EPS estimates from $2.54 and $3.07 to $1.42 and $2.59, respectively.
Transaction revenue presented a similar trend. The company reported approximately $420 million in trading revenues from the beginning of the quarter through February 10. This figure suggests a 7% decline compared to the previous quarter. Coinbase’s blended take rate for trading volumes was 36 basis points, slightly above Piper Sandler’s estimate of 34 basis points.
Benchmark adopted a different stance, despite also lowering its price target. Analyst Mark Palmer reduced his target from $421 to $267 but maintained a buy rating. He lowered his full-year 2026 EPS estimate by 21% to $5.34, with first-quarter estimates projected to be 19% below consensus at $0.96.
Business Mix Shifts as Crypto Markets Weaken
Palmer’s analysis focuses on underlying business dynamics. Institutional transaction revenue saw a sequential increase of 37% to $185 million in Q4. This growth was largely driven by the first full quarter of contributions from Deribit, the crypto options exchange acquired by Coinbase for $2.9 billion last August.
The company highlighted derivatives as a significant growth area for 2026 and beyond. Stablecoin revenue rose by 3% to $364 million, despite a decrease in interest rates and cryptocurrency prices. Average USDC balances reached an all-time high during the quarter.
The shift in revenue composition is particularly notable. Subscription and services revenue amounted to $727.4 million, representing approximately 43% of net revenue in Q4. For the full year 2025, subscription and services revenue reached $2.8 billion, marking a 23% increase year-over-year and a 5.5-fold rise from the peak of the 2021 cycle.
Coinbase now reports 12 products generating over $100 million in annualized revenue. Paid Coinbase One subscribers are nearing 1 million. The company has introduced equities trading, covering nearly 10,000 stock tickers, and launched prediction markets, initially powered by Kalshi.
Fourth-Quarter Results Show Mixed Performance
Q4 net revenue of $1.71 billion decreased by 5% sequentially, aligning with management’s guidance but falling short of the $1.81 billion expected by Wall Street. Transaction revenue declined by 6% to $983 million, as the total cryptocurrency market capitalization dropped by 11% during the period.
On a GAAP basis, Coinbase reported a net loss of $667 million. This loss was attributed to an unrealized loss of $718 million on its crypto portfolio and $395 million in losses from strategic investments. Operating expenses totaled $1.51 billion, slightly below projections.
Other firms offered varied perspectives. Bernstein reaffirmed an outperform rating with a $440 target, suggesting the stock is undervalued, trading at approximately 11 times its 2025 earnings before interest, taxes, depreciation, and amortization (EV/EBITDA). Canaccord reduced its target to $300 from $400 but maintained a buy rating.
Coinbase concluded 2025 with $11.3 billion in cash. The company repurchased $1.7 billion in stock during Q4 and early February, fully offsetting the dilution from stock-based compensation in 2025. The board has authorized an additional $2 billion for buybacks, and management has guided for flat expenses in Q1 2026.
