TLDR
- Piper Sandler slashed Coinbase price target from $270 to $150, citing weak Q1 2026 guidance with subscription revenue midpoint 27% below consensus expectations
- Coinbase Q4 2025 earnings missed estimates with adjusted EBITDA of $566 million despite revenues of $1.71 billion beating by 3%, as stock fell 37.61% year-to-date
- Benchmark cut price target 37% to $267 from $421 but maintained buy rating, reducing full-year 2026 EPS estimate by 21% to $5.34
- Institutional transaction revenue jumped 37% to $185 million driven by Deribit acquisition, while subscription revenue reached 43% of total at $727.4 million
- Coinbase ended 2025 with $11.3 billion in cash and authorized additional $2 billion in buybacks after repurchasing $1.7 billion in Q4
Coinbase stock whipsawed this week after fourth-quarter earnings sparked sharp downgrades from Wall Street analysts. The crypto exchange platform now faces a price target range spanning $150 to $440 as firms debate whether recent weakness reflects temporary market headwinds or deeper structural concerns.
Piper Sandler delivered the harshest verdict Friday. The firm cut its price target from $270 to $150 while maintaining a neutral rating on the stock. The move followed Coinbase’s fourth-quarter report showing adjusted EBITDA of $566 million, which missed analyst expectations despite total net revenues of $1.71 billion coming in 3% above estimates.
The real pain came from forward guidance. Coinbase projected Q1 2026 subscription and services revenues between $550 million and $630 million. The midpoint sits 27% below what Wall Street anticipated. That disconnect prompted Piper Sandler to slash its 2026 and 2027 EPS estimates from $2.54 and $3.07 to $1.42 and $2.59 respectively.
Transaction revenue told a similar story. Coinbase reported approximately $420 million in quarter-to-date trading revenues through February 10. That figure tracks toward a 7% quarter-over-quarter decline. The company’s blended take rate for trading volumes came in at 36 basis points, just above Piper’s 34 basis point estimate.
Benchmark took a different approach despite also cutting its price target. Analyst Mark Palmer reduced his target from $421 to $267 but kept a buy rating. He lowered his full-year 2026 EPS estimate by 21% to $5.34, with first-quarter estimates sitting 19% below consensus at $0.96.
Business Mix Shifts as Crypto Markets Weaken
Palmer’s thesis centers on what’s happening beneath the surface. Institutional transaction revenue jumped 37% sequentially to $185 million in Q4. The first full quarter of contributions from Deribit, the crypto options exchange Coinbase acquired for $2.9 billion last August, drove much of that growth.
CEO Brian Armstrong pointed to derivatives as a major growth driver for 2026 and beyond. Stablecoin revenue rose 3% to $364 million despite declining interest rates and crypto prices. Average USDC balances hit an all-time high during the quarter.
The revenue mix shift stands out most clearly. Subscription and services revenue of $727.4 million made up roughly 43% of net revenue in Q4. Full-year 2025 subscription and services revenue hit $2.8 billion, up 23% year-over-year and 5.5 times the 2021 cycle peak.
Coinbase now claims 12 products generating over $100 million in annualized revenue. Paid Coinbase One subscribers approach 1 million. The company has rolled out equities trading with 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 declined 5% sequentially, matching management guidance but missing the $1.81 billion Wall Street expected. Transaction revenue fell 6% to $983 million as total crypto market cap dropped 11% during the period.
On a GAAP basis, Coinbase swung to a $667 million net loss. A $718 million unrealized loss on its crypto portfolio and $395 million in strategic investment losses drove the red ink. Operating expenses came in at $1.51 billion, slightly below forecasts.
Other firms weighed in with mixed views. Bernstein reiterated an outperform rating with a $440 target, arguing the stock trades too cheaply at roughly 11 times EV to 2025 earnings. Canaccord cut its target to $300 from $400 but maintained a buy rating.
Coinbase ended 2025 with $11.3 billion in cash. The company repurchased $1.7 billion in stock during Q4 and early February, fully offsetting 2025 dilution from stock-based compensation. The board authorized an additional $2 billion in buybacks, and management guided to flat expenses for Q1 2026.
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