Shares of Coinbase (COIN) jumped 12% on Friday despite the crypto exchange missing earnings expectations for the fourth quarter, as analysts reacted to the report with a mix of caution on short-term pressures and optimism about the company’s evolving business model.
The company had net revenue of $1.71 billion, below Wall Street estimates of $1.81 billion, while its core operating profit (adjusted EBITDA) came in at $566 million, missing consensus by about $653 million.
Coinbase reported a $667 million net loss under generally accepted accounting principles (GAAP), primarily due to a $718 million unrealized loss on its crypto investment portfolio and a $395 million loss on strategic investments.
Barclays analyst Benjamin Budish called Q4 “a miss across the board,” citing weak transactional and subscription revenue along with higher-than-expected operating expenses. Budish lowered his price target to $149 from $258, writing that trading activity, stablecoin-related interest income and crypto asset prices still account for most of Coinbase’s performance.
Still, he acknowledged encouraging trends, including an increase in Coinbase’s share of the USDC market cap, a growing subscriber base for Coinbase One and continued share buybacks, which reduced the share count by approximately 8% quarter-over-quarter.
Benchmark’s Mark Palmer reiterated a more bullish long-term view. While headline results were missed, Palmer pointed to Coinbase’s growing derivatives business, expanding product suite and stablecoin adoption as signs that the company is becoming more “diversified and sustainable.” He maintained a buy rating on the stock but cut his price target in half to $267 from $421.
Clear Street’s Owen Lau noted that Coinbase’s consumer monetization is under pressure, with the retail rate falling from 1.43% in Q3 to 1.31% in Q4. This decline, driven by a shift to advanced trading tools and the Coinbase One subscription model, reduced revenue per trade, but was partially offset by stronger engagement and cross-selling. He lowered his price target to $277 from $344, citing a prolonged crypto slump, weak retail participation and a more hawkish macro backdrop.
Despite the weak print, Lau said Coinbase’s long-term positioning looks stronger. The company now has 12 lines of business generating over $100 million in annual revenue, including two at more than $1 billion. Its base network, derivatives platform and growing stablecoin infrastructure are showing signs of wider utility beyond trading, he indicated.
JPMorgan also lowered its price target on COIN after the report, citing near-term earnings pressure.
Still, Coinbase reiterated its commitment to remain positive adjusted EBITDA across market cycles, supported by $14.1 billion in total available resources. Management said it continues to buy back shares and accumulate bitcoin by using part of the operating income.
